Landlord Tax Breaks: Top Deductions for Your U.S. Rental Property

Answer

Owning rental property in the United States comes with ongoing expenses that you can often write off against your rental income. Identifying allowable deductions helps you reduce taxable profit and keep more cash flow in your pocket. Below is an overview of common landlord deductions and key rules to follow.

Report all income and expenses on IRS Schedule E (Form 1040). Maintain organized records—receipts, invoices, bank statements and mileage logs—for at least three years. Here are primary categories you can typically deduct:

• Mortgage Interest
  Interest on loans used to purchase or improve the rental property. This includes first and second mortgages, as well as home equity loans secured by the property.
• Real Estate Taxes
  State, local and foreign property taxes levied on your rental unit during the tax year.
• Insurance Premiums
  Policies covering fire, flood, theft, landlord liability and other insurance for your rental.
• Repairs vs. Improvements
  Expenses to maintain the property—painting, fixing plumbing leaks or broken fixtures—are generally deductible in full. Capital improvements (adding a new roof, remodeling a kitchen) must be depreciated over their useful life, typically 27.5 years.
• Depreciation (MACRS)
  Allocate the building’s basis (excluding land value) evenly over 27.5 years using the Modified Accelerated Cost Recovery System.
• Professional Services
  Fees paid to accountants, attorneys, property managers and real estate agents for rental-related services.
• Utilities
  Costs for electricity, gas, water, trash and sewer that you, the landlord, pay on behalf of tenants.
• Travel and Vehicle Use
  Deduct actual auto expenses or the IRS standard mileage rate (e.g., 65.5¢ per mile in 2024) for trips related to maintenance, rent collection or inspections.
• Advertising and Marketing
  Expenditures for online listings, print ads, signage and photography to attract tenants.
• Supplies and Small Equipment
  Items like cleaning supplies, lightbulbs, filters and tools with a useful life under one year.

If you use the property personally (vacation home or mixed-use), you must prorate expenses based on days rented versus personal use. Short‑term rentals (e.g., Airbnb) may require different treatment—verify limits on deductions if you provide significant services or if rental days exceed 14 per year.

For complete details, consult IRS Publication 527, Residential Rental Property. Since tax rules change and individual circumstances vary, it’s advisable to consult a licensed CPA or tax attorney before filing your return.