It’s important to understand that while many expenses are deductible, there aren’t strict “write-off limits” in the sense of a maximum dollar amount for all deductions combined. Instead, deductions are generally limited to the actual, necessary, and ordinary expenses incurred for your rental business. However, there are specific rules and limitations for certain types of deductions.

Here’s a breakdown of what you need to know about how much you can deduct as a landlord and potential limitations:

Generally Deductible Rental Property Expenses (No Strict Limit, but Must be Ordinary and Necessary):

These are common expenses you can deduct from your gross rental income in the year they are incurred. The total amount you can deduct for these categories is generally the actual amount you spent, as long as the expenses are:

• Ordinary: Common and accepted in the rental property business.¹
• Necessary: Helpful and appropriate for your rental business.

Examples of these expenses include:

• Mortgage Interest: You can deduct the interest you pay on your rental property mortgage.² The principal portion of the payment is not deductible.
• Property Taxes: Real estate taxes you pay on your rental property are deductible.³ Note that there’s a $10,000 limit ($5,000 if married filing separately) on deducting state and local taxes (SALT), which includes property taxes on your personal residence, but this limit generally does not apply to property taxes paid on a rental property.
• Insurance: Premiums you pay for insurance related to your rental property (e.g., fire, hazard, flood, liability) are deductible.⁴ If you prepay insurance for more than one year, you can only deduct the portion that applies to the current year.
• Repairs: Costs to keep your property in good operating condition (e.g., fixing leaks, painting to maintain appearance, appliance repairs) are fully deductible in the year incurred.⁵
• Maintenance: Expenses for regular upkeep (e.g., lawn care, cleaning services, pool maintenance) are deductible.⁶
• Utilities: If you pay for utilities for your rental property (and are not reimbursed by tenants), these are deductible.⁷
• Advertising: Costs to advertise your rental property (e.g., online listings, signage) are deductible.⁸
• Property Management Fees: If you hire a property management company, their fees are deductible.⁹
• Legal and Professional Fees: Fees for attorneys, accountants, tax preparers (specifically for Schedule E), etc., related to your rental business are deductible.¹⁰
• Travel Expenses: Reasonable and necessary travel expenses to manage your rental property (e.g., visiting the property, meeting with contractors) are deductible.¹¹ You can typically deduct actual car expenses or use the standard mileage rate (for 2024, it was 67 cents per mile for business use).
• Supplies: Costs of small items used for your rental business (e.g., cleaning supplies, office supplies).¹²
• Home Office Expenses: If you have a dedicated space in your home that you use exclusively and regularly for your rental business, you may be able to deduct home office expenses.¹³ This deduction can be calculated using the actual expenses method or the simplified method ($5 per square foot, with a maximum of 300 square feet).

Depreciation (Limits Based on Asset Life):

• You can deduct the cost of your rental property (the building itself, not the land) and certain improvements over their useful life through depreciation.¹⁴
• Residential rental property is typically depreciated over 27.5 years using the straight-line method.¹⁵ This means you deduct the same amount each year.
• Personal property used in your rental (e.g., appliances, furniture) is depreciated over shorter periods (typically 5 years).
• Land is never depreciable.¹⁶
• You cannot deduct the entire cost of capital improvements (expenses that add value, prolong life, or adapt the property to a new use) in one year. These costs must be capitalized and depreciated over their useful life.

Passive Activity Loss Rules (Potential Limit on Overall Losses):

• Rental activity is generally considered a passive activity by the IRS.¹⁷
• Your ability to deduct losses from passive activities (including rental property losses) may be limited to the amount of income you have from other passive activities.¹⁸
• However, there’s a special real estate loss allowance that allows some landlords to deduct up to $25,000 of rental losses against non-passive income if their modified adjusted gross income (MAGI) is $100,000 or less.¹⁹ This allowance phases out as your MAGI increases and is completely eliminated if your MAGI is over $150,000.
• To qualify for this allowance, you must actively participate in the rental activity.²⁰ Active participation is a lower standard than “material participation” and generally means you make management decisions (e.g., approving tenants, setting rental terms, approving repairs).²¹
• Losses that are disallowed due to the passive activity rules can be carried forward to future years to offset passive income in those years or can be fully deducted when you sell the property.²²

Section 179 Deduction (Generally Not Applicable to Residential Rental Buildings):

• Section 179 of the IRS code allows businesses to deduct the full cost of qualifying personal property (like equipment and some software) in the year it’s placed in service, rather than depreciating it over several years.
• While the Tax Cuts and Jobs Act (TCJA) made some changes, Section 179 generally does not apply to real property like residential rental buildings or their structural components.
• However, you may be able to use Section 179 to deduct the cost of personal property used in your rental business (e.g., appliances, furniture) if your rental activity qualifies as a trade or business and you meet other requirements.²³ There are annual limits to the amount you can deduct under Section 179. For tax years beginning in 2024, the maximum Section 179 deduction is $1,220,000, and this limit is reduced if the total cost of Section 179 property placed in service exceeds $3,050,000.²⁴ Your deduction is also limited to your taxable income from your trade or business.

Important Considerations:

• Personal Expenses: You cannot deduct personal expenses, even if they relate to property you own. If you use part of your property for personal use, you need to allocate expenses.
• Hobby vs. Business: To deduct rental expenses, you must be operating the rental property with the intent to make a profit. If your rental activity is considered a hobby, your deductions may be limited to your gross rental income.
• Documentation: Keep thorough records of all income and expenses related to your rental property.²⁵ This includes receipts, invoices, and bank statements.²⁶
• Tax Professional: Given the complexities of rental property deductions, it’s highly recommended to consult with a qualified tax professional or CPA. They can provide personalized advice based on your specific situation and ensure you are taking all the deductions you are entitled to while complying with IRS regulations.

In summary, there isn’t a single “write-off limit” for landlords. You can generally deduct all ordinary and necessary expenses, but the timing of the deduction (immediate vs. depreciation over time) depends on the type of expense.²⁷ Passive activity loss rules can also limit the deductibility of overall losses.²⁸ Understanding these rules and keeping good records are essential for maximizing your deductions.