As the calendar turns toward year-end, many small landlords find themselves sorting through receipts, statements, and a few tax questions that can bite if left unchecked. This post centers on a single practical question you can use to guide your year-end checks, with a straightforward checklist and plain-language explanations. There’s no legalese here, just practical reminders to help you prepare for tax time without surprises.

The one concrete landlord question: What expenses can I deduct as a landlord this year?

Focusing on this question helps you identify actions you should take now to improve your tax position. You don’t need to reinvent your bookkeeping; you just need to review what you’ve paid for to operate and maintain your rental property and separate those costs from personal spending. The IRS (and similar systems in other countries) typically allow deductions for ordinary and necessary expenses related to rental property. The trick is to keep clear records, distinguish between personal and rental use, and ensure you have receipts or documentation that ties costs to the rental activity.

Key categories to consider for deductions:

• Operating expenses: Mortgage interest (not principal), property management fees, utilities you pay, insurance specific to the rental, licenses, and maintenance like repairs.
• Depreciation: The annual deduction that recognizes the wear and tear on the building and major improvements. This isn’t a cash outlay in the year, but it reduces taxable income.
• Improvements vs. repairs: Repairs keep property in good condition; improvements add to basis and are depreciated over time. Knowing the difference matters for deductibility in the right year.
• Travel and vehicle costs: If you travel to manage the property, some travel expenses can be deducted, primarily if you are the owner performing management tasks.
• Home office (if applicable): A portion of your home used regularly and exclusively for business tasks related to rental activities may qualify for an office deduction, depending on local rules.
• Local and state taxes and licenses: Permit fees, occupational taxes, and similar charges tied to the rental activity.
• Professional services: Fees paid to accountants, bookkeepers, or attorneys for rental-property related work, to the extent allowed by local rules.
• Advertising and tenant screening: Costs to advertise the vacancy and any tenant background checks if applicable to rental activity.

This list isn’t the final say on what you can deduct, but it helps you frame your end-of-year review. If something was paid specifically for the rental and not for personal use, it’s worth double-checking how it should be coded in your records.

A practical end-of-year checklist

Use this short list to guide your year-end work. It’s designed to be simple, not exhaustive, and to help you capture the essential items.

1. Gather receipts, invoices, and statements for the rental property for the year. Include major purchases (appliances, HVAC work) and small repairs.
2. Separate personal and rental expenses. If you use a single credit card or bank account for both, tag or categorize transactions clearly (rental vs. personal use).
3. Review mortgage interest statements. Ensure you have the annual Form 1098 (or equivalent) and note the interest paid during the year.
4. Tally depreciation and improvements. If you’ve added capital improvements, record the cost and date; confirm whether you should accelerate or spread depreciation.
5. Reconcile insurance, property management, and service fees. Confirm you have paid year-long premiums or fees and that they relate to the rental activity.
6. Check travel and mileage records. If you used your vehicle for rental-related tasks, compile a log with dates, purposes, and miles.
7. Confirm records for utilities and billings. If you cover utilities, have detailed usage and cost records to justify deductions.
8. Review ads, tenant screening costs, and professional services. Ensure you have receipts and a note about what each expense covers in the rental life cycle.
9. Prepare a simple summary sheet. List categories, totals, and notes so you can hand this to your tax preparer or use it to review your own entries.
10. Back up your data. Create a safe copy of receipts, statements, and depreciation schedules—ideally in two places.

If you don’t have a tax professional, a basic bookkeeping system can still help you stay organized. Even simple software or a well-structured spreadsheet can make the end-of-year process more predictable and less stressful.

A realistic approach to depreciation and improvements

Depreciation is often the biggest year-end consideration for landlords. It lets you deduct the wear and tear of the property over time. If you’ve made significant improvements (renovating a kitchen, adding a new HVAC system, or replacing the roof), those costs are typically treated as capital improvements and depreciated over several years rather than deducted all at once. It’s worth speaking with a tax professional to confirm how your jurisdiction handles depreciation schedules, but you can start by identifying:

• The date and cost of major improvements.
• The asset class (building, appliances, major systems).
• The depreciation method commonly used for rental properties in your area.

Keep in mind that depreciation schedules are not a one-time decision; they affect your tax returns across multiple years. Having clear records now will help you apply the correct method when you file.

What not to assume at year end

• Don’t guess about what qualifies. If you’re unsure whether an expense is deductible, note it and ask your tax professional when it’s practical.
• Don’t mix personal and rental records. Mixed receipts should be separated and supported with notes.
• Don’t overlook smaller items. Small maintenance tasks add up over time and can add up to meaningful deductions if properly tracked.

A simple plan for staying organized next year

• Create a dedicated folder (digital or physical) for rental expenses. Include receipts, invoices, and statements.
• Use a consistent labeling system (e.g., RENTAL-2026-CLEANING or RENTAL-2026-REPAIR) to keep items discoverable.
• Consider a single expense ledger or a simple spreadsheet with columns for date, category, description, amount, and deduction status.
• Schedule quarterly reviews. A short check-in each quarter helps prevent a big end-of-year scramble.
• Prepare a lightweight depreciation log. Track major improvements and their cost and date for easier year-end reporting.

This approach is about steady, realistic record-keeping rather than chasing every possible deduction. The aim is to have clear records that support the deductions you claim and to avoid any last-minute stress when you file taxes.

Disclaimer

This is not legal or financial advice. Laws vary by location.

Helpful resources

• The Book on Managing Rental Properties - practical, broad overview for landlords.
• Security Deposit Log Book - keep deposit-related records organized.
• Every Landlord’s Tax Deduction Guide - deductions-focused reference.
• Rental Property Expense Ledger - simple expense tracking for rentals.