Every Rental Property Tax Deduction You Can Claim in 2026

Why Most Landlords Leave Money on the Table 

Rental property offers one of the most favorable tax treatments in the entire U.S. tax code. Yet most individual landlords claim only a fraction of the deductions they're entitled to — not because they're trying to cut corners, but because they don't know what qualifies or they can't find the documentation when they need it.

The IRS doesn't send you a checklist. Your CPA can only work with what you give them. If you don't track an expense, categorize it correctly, and provide documentation, the deduction doesn't exist as far as your tax return is concerned. 

Here's the comprehensive list of what you can deduct, organized by category, with the specifics that matter for individual landlords in 2026. 

Mortgage Interest 

The single largest deduction for most landlords. You can deduct the interest portion of your mortgage payments on rental properties — no limit on the number of properties or the loan amount, unlike the $750,000 cap on personal residence mortgages. 

For a $300,000 property with a 7% mortgage, you're looking at roughly $20,000 in deductible interest in the early years of the loan. This alone can offset a significant portion of your rental income for tax purposes. 

Also deductible: interest on home equity loans used to improve rental properties, interest on personal loans used for rental property purposes (document the use carefully), and points paid to obtain the mortgage. 

Depreciation 

Depreciation allows you to deduct the cost of the building (not the land) over 27.5 years for residential rental property. For a property purchased at $300,000 where the land is valued at $75,000, you can depreciate $225,000 over 27.5 years — approximately $8,182 per year. 

This is a paper deduction. You're not spending this money — you're recovering the cost of the asset over its useful life. But it reduces your taxable rental income by thousands of dollars annually. 

Cost segregation studies can accelerate depreciation by identifying components of the property (appliances, fixtures, landscaping, paving) that qualify for shorter depreciation schedules — 5, 7, or 15 years instead of 27.5. For properties valued above $500,000, a cost segregation study typically pays for itself many times over in first-year tax savings. 

Note: Recent tax legislation may have changed bonus depreciation rules. Consult with your CPA about the current status of 100% bonus depreciation for qualifying improvements and whether cost segregation makes sense for your portfolio. 

Operating Expenses 

These are the day-to-day costs of running your rental business, all fully deductible in the year incurred. 

Property management fees

‍If you use a property management company, every dollar of their fees is deductible. If you use software or AI tools for self-management, those subscription costs are equally deductible. 

Repairs and maintenance

‍Plumber visits, electrical work, appliance repairs, painting, cleaning between tenants, pest control, landscaping, HVAC service, and general handyman work. The key distinction:

• ‍Repairs (fixing something that's broken) are deductible in full in the current year. Improvements (making something better or adding something new) must be capitalized and depreciated. 
• ‍Insurance. Landlord insurance premiums, umbrella policy premiums, and any additional coverage for rental activities. 
• ‍Property taxes. Fully deductible for rental properties, with no limit (unlike the $10,000 SALT cap on personal property taxes). 
• ‍Utilities. If you pay for any utilities on behalf of the property — water, sewer, gas, electric, trash — those costs are deductible. 
• ‍HOA fees. Homeowners association dues for rental properties are fully deductible. 
• ‍Advertising. Costs for listing vacancies on rental platforms, yard signs, and any other marketing to find tenants. 
• ‍Legal and professional fees. Attorney fees for lease preparation, eviction proceedings, or entity structuring. CPA fees for tax preparation. Screening service fees. 

Travel Expenses 

If you travel to manage your properties, those costs are deductible. This includes mileage driven to properties for inspections, maintenance oversight, or tenant meetings (67 cents per mile for 2024; check the current year's rate). Airfare and hotel for out-of-state property management. Meals during property management travel (50% deductible). 

Keep a mileage log. The IRS requires contemporaneous documentation — after-the-fact estimates don't count. Use a mileage tracking app that logs the date, destination, purpose, and distance of each trip. 

Home Office Deduction 

If you manage your rental properties from a dedicated space in your home, you may qualify for the home office deduction. The space must be used regularly and exclusively for property management — a desk in the corner of your living room doesn't qualify. 

The simplified method allows $5 per square foot, up to 300 square feet ($1,500 maximum). The regular method requires calculating the percentage of your home used for business and applying that percentage to your housing expenses. 

Qualified Business Income (QBI) Deduction 

Rental income may qualify for the Section 199A QBI deduction, which allows a deduction of up to 20% of qualified business income. Eligibility depends on several factors, including whether your rental activities rise to the level of a trade or business. 

The IRS safe harbor requires that you spend at least 250 hours per year on rental activities and maintain separate books and records. For landlords managing five or more properties, meeting the 250-hour threshold is usually straightforward.

This deduction can be worth thousands — 20% of $50,000 in net rental income is a $10,000 deduction. Make sure your CPA evaluates your eligibility. 

The Documentation Problem 

Every deduction listed above requires documentation. And this is where most individual landlords fall apart. 

The expense itself is real. You paid the plumber $175 in March. But without a receipt, a record of which property it was for, and a category that maps to Schedule E, that deduction is functionally lost. 

At tax time, most landlords sit down with a shoebox of receipts, a bank statement, and a best guess at categorization. Their CPA does what they can, but conservative CPAs won't claim deductions they can't document — which means you leave money on the table. 

The fix isn't more discipline at tax time. It's real-time categorization throughout the year. Every expense tagged to a property, categorized by type, and documented with a receipt the moment it occurs. When April arrives, your Schedule E is already drafted.