General information, not tax advice — talk to a CPA about your situation. But knowing what's deductible before December beats scrambling in April.
Deductions landlords routinely miss
- Depreciation. The building (not the land) depreciates over 27.5 years. On a $200,000 rental with $40,000 land value, that's roughly $5,800/year in paper deductions — often the single biggest write-off, and the one DIY landlords forget.
- Mortgage interest on the rental loan.
- Property management fees — our flat 10% is fully deductible.
- Repairs and maintenance — every at-cost invoice.
- Mileage to and from the property for showings, inspections, and repairs.
- Insurance, property taxes, advertising, legal and filing fees, and software.
- Home office if you manage from a dedicated space (stricter rules — ask your CPA).
The repairs-vs-improvements trap
This one trips up everyone. A repair (fixing a leak, patching drywall, replacing a broken faucet) is deductible this year. An improvement (new roof, new furnace, a kitchen remodel) must be depreciated over years. Same checkbook, very different tax treatment. When work is borderline, the wording on the invoice matters — which is one reason we keep every work order itemized and photo-documented.
Rule of thumb: did it keep the property in working order (repair) or make it better/last longer (improvement)? Repairs hit this year's taxes; improvements stretch out.
Schedule E, briefly
Most individual landlords report rental income and expenses on Schedule E of their federal return, then flow it to the Wisconsin return. Track income and each expense category separately all year — not in a shoebox in March. Issue 1099-NEC forms to unincorporated contractors you paid $600+.
Records that survive an audit
- A separate bank account for the rental — never commingle.
- Every receipt, digitized, tagged by property and category.
- A mileage log (date, purpose, miles).
- Year-end statements showing income and itemized expenses.
That last one is exactly the year-end owner packet we hand every managed owner — income, expenses, and invoices in one place for the CPA. It's part of what management buys you beyond just collecting rent.
When to hire a CPA
If you own one paid-off single-family, software might be enough. Once you have a mortgage, depreciation, multiple units, or you're considering a 1031 exchange, a CPA usually pays for themselves. Pair good books with a manager who keeps clean records, and tax season stops being a fire drill.
Curious what a Brown County rental should be earning before taxes? Get a free rent estimate or talk to us.