Tax Deduction Estimator

Maximizing Rental Property Tax Deductions

Rental property owners can significantly reduce their tax burden through proper tax planning and deductions. Our tax deduction estimator helps you understand potential tax savings from common landlord expenses.

Top Tax Deductions for Landlords

1. Depreciation

The largest deduction for most landlords. You can deduct 3.636% of your building's value annually (excluding land) over 27.5 years. This is a "paper loss" that reduces taxable income without requiring any cash outlay.

2. Mortgage Interest

Interest paid on loans used to buy, build, or improve rental properties is fully deductible. This often represents one of the largest cash deductions.

3. Repairs vs. Improvements

Repairs (fixing broken items) are immediately deductible. Improvements (adding value) must be depreciated over time. Examples:

• Repair: Fixing a leaky roof = immediate deduction
• Improvement: Replacing entire roof = depreciate over 27.5 years

4. Operating Expenses

Day-to-day expenses are fully deductible:

• Property taxes
• Insurance premiums
• Utilities (if you pay them)
• Property management fees
• HOA fees
• Advertising for tenants
• Legal and professional fees
• Pest control
• Lawn care and snow removal

Tax Planning Strategies

1. Separate Repairs from Improvements - Properly categorize expenses to maximize immediate deductions
2. Track Mileage - Keep a log of all trips to manage properties (67¢ per mile in 2024)
3. Home Office Deduction - If you have dedicated space for managing rentals, you may qualify
4. Section 179 Deduction - Immediately deduct up to $1.16M for certain property improvements in 2024
5. Cost Segregation - For larger properties, accelerate depreciation on certain components

Related Resources

Calculate your complete tax situation with our Schedule E Calculator, or estimate your investment returns with our ROI Calculator.