You got into real estate to build wealth, not to hand over more than necessary to the IRS. But here’s the thing: many rental property owners overpay in taxes every year simply because they don’t know what they can deduct.
The tax code isn’t designed to be obvious, and tax software? It’s built for the masses, not for landlords looking to maximize their deductions. If you’re not working with an Austin Texas CPA who understands real estate, you could be leaving thousands on the table.
Here are seven often-overlooked tax deductions that every rental property owner should be claiming.
1. Depreciation – The Easiest Way to Lower Your Taxable Income
If you’re not taking full advantage of depreciation, you’re doing real estate taxes wrong.
Why It Matters:
- The IRS lets you write off a portion of your rental property’s value every year because, on paper, it’s “wearing down.”
- Residential rentals depreciate over 5 years, which means thousands in annual deductions.
- A cost segregation study can accelerate depreciation on things like appliances, flooring, and landscaping, allowing you to deduct more upfront.
How to Maximize It:
A real estate-savvy Austin tax accountant can ensure you’re structuring depreciation correctly and strategically to lower your taxable income.
2. Home Office Deduction – Managing Your Rentals Can Work in Your Favor
If you manage your properties from home, you might qualify for a home office deduction.
What You Can Deduct:
- A portion of your rent or mortgage interest
- Utilities like electricity and internet
- Office furniture, business software, and computers
What You Need to Know:
Your home office must be exclusively used for managing your rental properties. No, working from the kitchen table doesn’t count.
If you’re unsure how to structure this, an Austin small business accountant can help make sure you’re maximizing deductions without raising red flags.
3. Travel & Mileage – Because Property Visits Add Up
Think about how often you drive to your rental property—whether it’s for repairs, tenant meetings, or inspections. Those miles are deductible.
What You Can Deduct:
- 67 cents per mile (IRS rate for 2024)
- Flights, hotels, and rental cars for out-of-state property visits
- Meals if you travel overnight for rental-related purposes
Pro Tip:
The IRS loves documentation so track your mileage and receipts carefully. A tax advisor in Austin can help ensure you’re claiming these deductions the right way.
4. Utility & Maintenance Costs – Stop Paying More Than You Need To
If you cover utilities for your rental property, those expenses are fully deductible.
Examples of Deductible Costs:
✔ Electricity, gas, and water
✔ Trash collection
✔ Internet and cable (if included in the lease)
Regular maintenance expenses like HVAC servicing, pest control, and landscaping are also deductible.
The Catch:
Major upgrades (like a new roof or HVAC system) must be depreciated over time instead of deducted all at once. A CPA firm in Austin, Texas can help you properly categorize expenses so you get the biggest tax advantage.
5. Property Tax & Insurance – Two Big Deductions You Can’t Forget
Your property taxes and insurance premiums are major expenses, but they’re also fully deductible.
What’s Included?
✔ Annual property taxes
✔ Landlord insurance premiums
✔ Flood or earthquake insurance
✔ Umbrella policies for extra liability protection
Many landlords overlook umbrella policies, which provide additional liability coverage. An Austin accounting firm can ensure every eligible insurance deduction is accounted for.
6. Record-Keeping – The Key to Unlocking Every Deduction
A messy tax filing system = lost money. If you’re not tracking your expenses properly, you’re almost guaranteed to miss out on deductions.
Best Practices for Maximizing Deductions:
✔ Use separate bank accounts and credit cards for rental property expenses
✔ Keep receipts, invoices, and mileage logs organized
✔ Work with an Austin accounting service to streamline your bookkeeping
Not only does this keep more money in your pocket, but it also protects you in case of an IRS audit.
7. Why a CPA Can Uncover Deductions You Didn’t Know Existed
Even experienced landlords miss out on tax-saving opportunities simply because they don’t know what to look for.
How a CPA Can Help:
✔ Identify hidden deductions that tax software overlooks
✔ Structure your taxes to minimize your liability
✔ Ensure IRS compliance so you don’t run into penalties
✔ Plan long-term strategies for future investments and tax deferrals
A real estate-savvy Austin, TX accountant doesn’t just file your taxes. They create a strategy that keeps more money in your pocket.
Maximize Your Deductions and Keep More of Your Rental Income
The difference between a standard tax return and a well-planned one? Thousands of dollars in tax savings every year.
If you’re not working with an expert, you could be overpaying the IRS year after year.
At Insogna CPA, we specialize in real estate tax strategies, helping property owners maximize deductions, reduce tax burdens, and stay compliant with IRS regulations. Whether you have one rental or an entire portfolio, our Austin accounting services are designed to help you keep more of what you earn.
Make sure you’re claiming every deduction possible. Schedule a tax planning session today...