Taxes and Recordkeeping for Landlords (Educational Overview)

Rental income and expenses are reported on Schedule E

Rental real estate income and expenses are generally reported on IRS Schedule E, Supplemental Income and Loss, one page per property. This is an educational overview, not tax advice; work with a CPA on your specific situation, because rules around active participation, passive activity limits, and qualified business income depend on your facts.

Track the deductible expenses contemporaneously

Common deductible expenses include mortgage interest, property taxes, insurance, repairs, maintenance, management fees, utilities you pay, travel to the property, legal and professional fees, and depreciation. The key is recording them as they happen, with receipts and memos, rather than reconstructing them in March.

• Mortgage interest and property taxes.
• Repairs (deducted now) versus improvements (depreciated).
• Management, maintenance, utilities, and travel.
• Depreciation of the building over its recovery period.

Keep the records that survive scrutiny

Keep receipts, invoices, mileage logs written the day you drive, lease documents, and bank statements organized by property and year. A contemporaneous mileage log and a memo explaining each repair-versus-improvement call are the records that hold up years later. Confirm retention periods and any state requirements with your CPA.