Summary of What This Blog Covers:
- Identifies Commonly Missed Real Estate Tax Deductions
This blog highlights seven often-overlooked deductions that real estate investors frequently miss—such as home office expenses, mileage, depreciation, and marketing costs—and explains how to properly claim them with the help of a qualified CPA in Austin, Texas. - Breaks Down Strategic Tax Tools Like Depreciation and Cost Segregation
Learn how to maximize your deductions using tools like accelerated depreciation and cost segregation studies, helping you unlock tax savings now instead of over decades. - Explains How to Leverage Real Estate Losses Against Other Income
The blog dives into IRS rules around passive losses and introduces advanced strategies like Real Estate Professional Status (REPS) and the short-term rental loophole to help high-income investors reduce their overall tax burden. - Emphasizes the Importance of Compliance and Long-Term Tax Planning
From issuing W9 and 1099 NEC forms to planning for depreciation recapture and using 1031 exchanges, the blog outlines the key steps real estate investors must take to stay compliant and build a tax strategy that supports long-term wealth.
Let’s Be Honest: You Didn’t Get Into Real Estate to Talk Taxes
You’re here to build wealth, scale a portfolio, and maybe take a few well-earned breaks along the way, not to dig through IRS tax codes.
But here’s the hard truth: if you’re not maximizing your tax deductions, you’re losing money, possibly thousands every year.
At Insogna CPA, a trusted Austin, Texas CPA firm, we work with real estate investors every day from first-time landlords to full-time flippers. And even savvy investors are missing out on huge tax-saving opportunities.
Let’s change that. Below are seven deductions investors often miss, and how working with the right tax advisor in Austin can help you keep more of what you earn.
1. Your Home Office: Not Just a Desk But A Legit Deduction
If you manage your rental properties from home, you’re likely eligible for the home office deduction. A powerful write-off that reduces your taxable income.
You can deduct:
- A percentage of your mortgage interest or rent
- Utilities (like internet, water, electricity)
- Office furniture, repairs, and supplies
But there’s a catch:
The space must be used exclusively and regularly for rental activities. So no, your kitchen counter doesn’t count.
If you’re unsure how to calculate the deduction, a certified public accountant near you or a CPA in Austin, Texas can help you measure the square footage and apply the correct percentage to your home expenses.
2. Depreciation: The Silent Hero of Real Estate Investing
Let’s talk about depreciation – a deduction that can wipe out your rental income without touching your bank account.
What is depreciation?
It’s a non-cash expense that lets you write off part of your property’s value over 27.5 years for residential real estate.
Example:
Buy a $500,000 rental
Allocate $400,000 to the building
Divide that by 27.5 years
That’s $14,545/year in deductions, with zero cash outlay
A certified CPA near you can also help you accelerate this through cost segregation which reclassifies certain components (like flooring, appliances, or fencing) into 5-, 7-, or 15-year assets for faster write-offs.
3. Travel, Mileage, and Property Visits: Start Tracking Everything
Every time you drive to your rental, meet with a contractor, show the property to a potential tenant, or attend an inspection—guess what? That’s not just time well spent, it’s a deductible business expense.
Here’s what you can deduct in 2025:
- Mileage at the standard IRS rate: 67 cents per mile (unchanged from 2024 as of current guidance)
- Airfare and hotel stays for managing out-of-state properties
- Meals while traveling for rental-related purposes (50% deductible under IRS rules)
Whether it’s a quick site check or a cross-country flight to meet with your property manager, it all adds up.
The key is documentation. Use a mileage tracking app or keep a logbook. Save receipts for flights, hotels, and meals. And be consistent.
4. Professional Services: Your Experts Are Deductible Too
Paying for help shouldn’t feel like a loss, especially when it saves you taxes.
Deductible services include:
- Your Austin accounting firm or CPA firm in Austin, Texas
- Attorneys who draft leases, handle disputes, or support closings
- Property managers
- Bookkeepers and consultants
Hiring professionals doesn’t just save you time. With the right strategy, it lowers your taxable income too.
5. Utilities and Maintenance: The Everyday Stuff That Adds Up
If you’re paying for tenant utilities or footing the bill for ongoing maintenance, don’t forget to deduct it.
Deductible expenses include:
- Electricity, gas, water, internet (if you’re covering it)
- Trash collection and pest control
- HVAC repairs, plumbing fixes, landscaping
Repairs vs. Improvements:
Repairs (fixing a water heater) = immediate deduction
Improvements (replacing the whole HVAC) = depreciated over time
A skilled taxation accountant or chartered public accountant will help you distinguish between the two and file accordingly.
6. Tenant Acquisition and Marketing: Finding Good Tenants Costs Money
Yes, you can deduct your marketing efforts from listing photos to Zillow ads.
You can write off:
- Paid listings (like Apartments.com or Rent.com)
- Social media advertising
- Photography and videography
- Printed flyers, signage, and direct mail
At Insogna CPA, we help clients capture every marketing dollar and file it under the right category using our services accounting system, so you’re not leaving money on the table.
7. Insurance and Umbrella Policies: Protect Yourself and Save
Insurance isn’t just essential, it’s deductible.
What’s included:
- Standard landlord insurance
- Flood, earthquake, or fire coverage
- Liability policies
- Umbrella policies for extra protection
Many landlords forget umbrella coverage is also deductible but your tax professional near you won’t. We make sure every policy is categorized properly.
Bonus Strategy: Don’t Let Passive Losses Sit Idle
Here’s where high-income investors miss out: passive losses.
Under IRS rules:
- Rental income is passive, so it can only be offset by passive losses
- If your income is under $100,000–150,000, you might deduct up to $25,000
- Over $150,000? That deduction phases out unless…
You qualify for:
Real Estate Professional Status (REPS)
Work 750+ hours/year in real estate, and more than 50% of your total work time, and you can:
- Deduct losses against all income from W-2s, business income, you name it
Short-Term Rental Loophole
Own an Airbnb? If the average stay is under 7 days and you materially participate, the IRS might consider it non-passive, letting you deduct losses against active income.
A real estate-savvy CPA in Austin, Texas can help you qualify and comply, so you’re not leaving those “trapped” losses unused.
Planning to Sell? Watch for Depreciation Recapture
When you sell:
- The IRS “recaptures” the depreciation you claimed
- You pay tax, usually 25% on the recaptured amount
Want to avoid the sting?
Use a 1031 exchange.
This lets you roll your gain into a new property, deferring capital gains and depreciation recapture tax.
Our team at Insogna CPA, one of the most experienced CPA firms in Austin, Texas, handles:
- Exchange timelines
- Qualified intermediary coordination
- IRS compliance and multi-state filings
If you’re thinking about selling, talk to a tax advisor near you before listing the property.
What About Compliance? Because Great Deductions Need Great Records
Even the best deductions won’t help if your records are a mess.
We help investors across Texas and beyond with:
- W9 tax form collection
- 1099 NEC filings for vendors
- FBAR filing if your rental income flows through foreign bank accounts
- Schedule E vs. Schedule C classifications
- Quarterly estimates and audit protection
Working with a CPA firm in Austin, Texas that understands investor filings will save you from IRS headaches down the road.
Filing Checklist for Real Estate Investors
Before you hit “submit,” make sure you’ve:
✔ Tracked and categorized all expenses
✔ Filed the correct tax forms (W9, 1099 NEC, FBAR)
✔ Created depreciation schedules or ordered a cost segregation study
✔ Separated building and land for depreciation
✔ Determined if REPS or STR rules apply
✔ Planned for depreciation recapture or a 1031 exchange
✔ Worked with a certified CPA or tax preparer near you who specializes in real estate
Why Investors Choose Insogna CPA
You’re not just filing a return. You’re building a portfolio. And you need more than a one-size-fits-all accountant.
At Insogna CPA, your go-to Austin, TX accountant, we deliver:
- Deep expertise in real estate tax planning
- A team of certified CPAs, chartered professional accountants, and enrolled agents
- Full-service tax planning, including cost segregation and 1031 exchange strategy
- Year-round support from one of the most trusted CPA firms in Austin
- A client-first approach that helps you grow your portfolio tax-efficiently
Ready to Start Keeping More of What You Earn?
Taxes shouldn’t be a mystery or a missed opportunity. With the right guidance, they become part of your wealth-building engine.
Schedule your free consultation today with Insogna CPA, your trusted Austin, Texas CPA firm, and let’s turn your next tax return into a strategic step forward.
Because in real estate, it’s not just about what you make. It’s about what you keep...