The IRS lets you deduct ordinary and necessary expenses required to manage, conserve, or maintain property that you rent to others. You're allowed to deduct these expenses if your property is vacant, as long as you're trying to rent it.
Also, expenses must be deducted in the year they are paid. For example, if a pest-control company serviced your rental in 2018 but you didn't pay them until early 2019, you'd deduct that expense on your 2019 tax return.
Deductible expenses include, but are not limited to:
- Cleaning and cleaning supplies
- Maintenance and related supplies
- Repairs
- Utilities
- Insurance
- Travel to and from the property
- Management fees
- Legal and professional fees
- Commissions
- Taxes and tax return preparation
- Lease cancellation costs
- Advertising
- Real estate taxes
- Mortgage interest
- Refinance fees and mortgage points are entered in the Assets/Depreciation section instead of the Expensessection. The IRS considers these "amortizable intangibles" which means they must be depreciated, not expensed.
