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Other Expenses

Other expenses you can deduct from your rental income include:


These expenses include payments for newspaper ads, signs and listing your property with a broker.

Auto and Travel

You can deduct both local travel expenses and expenses for travel away from home if the primary purpose of the travel is to collect rental income or to manage, conserve or maintain your rental property. If you ravel overnight away from home, you can deduct 50% of your meal expenses. For both kinds of travel, you must keep written records and your must properly allocate expenses between rental and nonrental activities.

Generally if you use your personal car, pickup truck, or light van for rental activities, you can deduct either actual expenses or the standard mileage rate for all business miles. The standard mileage rate for 2006 was 44.5 cents a mile.

How to deduct car expenses?

To deduct car expense under either method, you must complete Part V of Form 4562, Depreciation and Amortization, and attach it to your tax return.

Cleaning and Maintenance

This includes the cost of supplies, material and labor (not yours) for maintaining property or preparing it for rent.


If you pay someone to find renters or collect rents, you can deduct these payments.


Premiums for insurance for property damage and personal injury liability are deductible. If you pay a premium for more than one year in advance, each year you can deduct the part of the premium that would apply to that year. You cannot deduct the total premium in the year you pay it.

Legal and other professional fees

Such fees include attorney's fees for preparing a lease, collecting rents, or evicting tenants. You can also deduct fees you pay to an accountant. You can deduct the part of your tax preparation fee that is related to preparing part I of schedule E.

Mortgage interest, supplies, taxes, and utilities

These are deductible. However, you generally cannot deduct charges for local benefits that increase the value of your property such as charges for putting in streets, sidewalks, or sewer systems. These charges are also not depreciable. They do increase the basis of your property , reducing any gain you may have upon the sale of the property. You can deduct local benefit charges if they are for maintaining, repairing or paying interest charges for the benefit rather than for construction of the benefit.



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