How to Track Rental Property Expenses (Without Hating It)
Every dollar you spend on your rental tells part of the story at tax time. The trouble is that receipts pile up in glove boxes, email inboxes and kitchen drawers. By April, it's hard to remember what that $86 hardware store charge was for.
Free printable for this guide: Rental Expense Tracker
A simple monthly tracking habit fixes that. Here's how to set one up.
Why tracking expenses matters
- You can deduct what you can prove. The IRS says that in most cases, the expenses of renting your property, such as maintenance, insurance, taxes and interest, can be deducted from your rental income. You need records to back them up.
- You'll know if your rental is actually making money. Rent minus expenses is the real number that matters.
- Your tax preparer will work faster (and may charge less) with organized totals.
Common rental expense categories
The IRS lists these as the most common rental expenses in Publication 527:
- Advertising
- Auto and travel expenses
- Cleaning and maintenance
- Commissions
- Depreciation
- Insurance
- Interest (other)
- Legal and other professional fees
- Local transportation expenses
- Management fees
- Mortgage interest paid to banks, etc.
- Points
- Rental payments
- Repairs
- Taxes
- Utilities
Using categories like these makes it easy to total each one at year-end.
Repairs vs. improvements: keep them separate
This is the one distinction worth learning. The IRS says you can generally deduct the cost of repairing or maintaining your rental. But you must capitalize (and generally depreciate over time) the cost of an improvement, which the IRS describes as something that results in a betterment to your property, restores it, or adapts it to a new or different use.
Examples the IRS lists as improvements include a new roof, a new furnace or water heater, wall-to-wall carpeting, kitchen modernization, a deck or a fence. Fixing a leaky faucet or patching a small hole is generally a repair.
The IRS specifically advises you to separate the costs of repairs and improvements and keep accurate records. Some situations are gray areas, and there are IRS safe harbors that can change the treatment, so let your tax preparer make the final call. Your job is just to record each expense clearly with a short description.
A few expenses landlords often miss
- Mileage. If you drive to collect rent or maintain your property, you may be able to deduct it. For 2026, the IRS business standard mileage rate is 72.5 cents a mile for January 1 through June 30 and 76 cents a mile for July 1 through December 31 (see the IRS standard mileage rates page). You must keep records such as a mileage log. Trips between your home and your rental are generally treated as commuting unless your home is your principal place of business, according to the IRS.
- Tax prep fees for the rental part of your return.
- Expenses while the unit is vacant. The IRS says you may be able to deduct ordinary and necessary expenses while a property is held for rent but vacant. You can't deduct lost rent, though.
- Insurance paid in advance. If you prepay more than a year of premiums, the IRS says you can deduct only the part that applies to each year.
A simple monthly system
- Keep receipts in one place. A folder, envelope, or phone photo album per property.
- Once a month, log everything. Date, vendor, amount, category, which property, and a short note ("replaced kitchen faucet, unit 2").
- Mark repairs and improvements clearly.
- Total by category at the end of each month.
- At year-end, add up the months and hand the totals to your tax preparer.
Using a separate bank account or card for your rentals makes this much easier, because every charge on that statement is a rental expense.
How long to keep receipts
The IRS says to keep records that support deductions until the period of limitations for that return runs out, which is generally 3 years. Keep records for improvements longer, because you'll need them to figure depreciation and your gain or loss when you sell.
Get the free tracker: Our Rental Expense Tracker lets you log expenses by month and total them by category for the year, in 2 pages. Download it free here.
At year-end, use the Year-End Tax Prep Checklist to gather everything else, and track rent coming in with the Rent Payment Ledger.
FAQ
Can I deduct the full cost of a new roof this year?
Generally, no. The IRS lists a new roof as an improvement, which is usually depreciated over time. Ask your tax preparer about your situation.
Do I need paper receipts?
The IRS doesn't require a specific recordkeeping system, but you need records that clearly show your income and expenses. Photos or scans of receipts work for many landlords.
Should I track expenses separately for each property?
Yes. The IRS asks you to list income, expenses and depreciation for each rental property on Schedule E.
The LandlordPrintables team
This article is general information, not tax advice. Tax rules change, so confirm details with the IRS or your tax preparer.
Sources: IRS, Publication 527, Residential Rental Property (2025); IRS, Standard mileage rates; IRS, Topic no. 305, Recordkeeping; IRS, How long should I keep records?