The 7 Expenses Most First-Year Landlords Forget at Tax Time

[Burton Williford]

Every spring this forum fills up with the same question from new landlords: "I just got my first 1099 from my rental — what am I supposed to actually deduct?" And every year, first-year investors leave thousands of dollars on the table because nobody told them what counts.

Here's the list I keep on my own portfolio. None of it is exotic. It's just stuff that doesn't show up in your bank statement labeled "rental expense."

1. Mileage to and from the property. $0.70/mile in 2025. A landlord who visits one property weekly logs roughly 2,000 miles a year — that's $1,400 in deductions. Three properties? $4,200. Most people lose this entirely because they don't track contemporaneously. The IRS requires the date, locations, business purpose, and miles for every trip. A 30-second log entry at the moment of the trip is the difference between keeping or losing the deduction at audit.

2. Depreciation on the building. 27.5 years straight-line on the building portion (not the land). On a $250K rental where $200K is the building, that's about $7,272/year in non-cash deductions. New investors sometimes skip this thinking "I'll claim it later." You can't — it gets recaptured when you sell whether you claimed it or not, so always claim it.

3. Home office, if you manage from home. If you have a dedicated space for managing your rentals — even a corner of a room — it's deductible. Most landlords assume "home office = self-employed only," but Schedule E activities can qualify too. The simplified method is $5/sq ft up to 300 sq ft = max $1,500.

4. Bank fees and payment processor fees. If you use Stripe/PayPal/etc. to collect rent, those processing fees are deductible. Same for the monthly fee on your rental-only checking account. Tiny per transaction, adds up to a few hundred a year.

5. Tenant screening costs. Background checks, credit checks, application fees you cover. Most landlords lump these into "miscellaneous." They have their own clean category as ordinary business expenses.

6. Travel to evaluate properties you didn't end up buying. Gray area but it's allowed if you're an active investor in the asset class. Flew to Phoenix to look at three SFRs, didn't buy any? The flight, hotel, rental car, and meals are deductible as a cost of doing business. Keep a log of which properties you actually looked at and when.

7. Continuing education. BP Pro membership, real estate conferences, the books you bought to learn the business, courses on landlording, even some podcasts you pay for. All deductible. Most landlords forget this entirely.

The thing nobody tells you: the IRS doesn't care if you claim a deduction. They care if you can prove it under audit. Which means the difference between "I keep good records" and "I lost $3,000 in real deductions" is whether you logged the thing AT the time it happened — not at 11pm on April 14th trying to reconstruct the year from credit card statements.

Not a CPA — always talk to one before you file. But these are the seven I see new landlords miss most consistently.

What did I leave off the list? Curious what other regulars track that I should add.

[Aaron Zimmerman]

@Burton Williford surprisingly, id say property taxes, insurance, mortgage interest. It's shocking how many people don't get these amounts right. And then repairs vs capex is another big one that requires some additional thought.