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Schedule E expense categories for landlords: a plain-English guide
Most US landlords who own rentals in their own name report them on Schedule E (Form 1040), Part I. Knowing what each expense line means makes bookkeeping easier all year: if every expense you log already belongs to a Schedule E line, tax time becomes a matter of adding up columns. This guide explains each line in plain English, based on the 2025 form and its IRS instructions.
This is general information to help you organize records, not tax advice. Tax law changes and individual situations differ, so confirm how to report anything with a qualified tax professional.
Income lines
- Line 3, Rents received: all rent you received during the year, including advance rent (which counts in the year received) and amounts like late fees. A security deposit you plan to return is not rent; if you keep part of it, that part becomes income (IRS Publication 527).
- Line 4, Royalties received: for oil, gas, mineral or intellectual property royalties. Most landlords leave it empty.
Expense lines 5 to 19
Line 5: Advertising
Costs of finding tenants: listing fees on rental websites, paid ads, yard signs, professional listing photos.
Line 6: Auto and travel
Driving to your rentals for maintenance, showings, or collecting rent, and travel to a rental in another city. You generally use either the standard mileage rate or actual car expenses, and you need a record of the trips. The rules (including when travel counts) are in the Schedule E instructions and Publication 527.
Line 7: Cleaning and maintenance
Routine upkeep that keeps the property in good condition: turnover cleaning, lawn care, snow removal, pest control, gutter cleaning.
Line 8: Commissions
Commissions paid to an agent or company for finding a tenant (leasing commissions). Short-term rental hosts often record booking-platform service fees here.
Line 9: Insurance
Landlord (dwelling fire) policies, liability and umbrella coverage for the rental, flood insurance, and rent-loss coverage. If you prepay several years of premiums, only the part for this year generally belongs on this year's return.
Line 10: Legal and other professional fees
Attorneys (for lease reviews or evictions), accountants and tax preparers for the rental portion of your return, and bookkeeping help.
Line 11: Management fees
What you pay a property manager to run the property, usually a percentage of rent collected. Separate leasing fees can go on line 8.
Line 12: Mortgage interest paid to banks, etc.
Interest on loans for the rental property, usually reported to you on Form 1098 by your lender. Only the interest part of your payment belongs here; principal is not an expense. Escrowed property taxes and insurance go on their own lines.
Line 13: Other interest
Interest on other loans used for the rental, such as a loan from a private lender who doesn't issue a Form 1098, or interest on a credit card used only for rental expenses.
Line 14: Repairs
Costs to keep the property in "an ordinarily efficient operating condition," as the IRS instructions put it: fixing a broken lock, painting a room, repairing a leak, replacing a broken window pane. Improvements don't belong here (see below).
Line 15: Supplies
Small items used for the rental: light bulbs, air filters, smoke detector batteries, cleaning products, small hardware.
Line 16: Taxes
Property tax on the rental and other taxes tied to the rental business, such as local rental license taxes. Your federal income tax is not a rental expense.
Line 17: Utilities
Utilities you pay as the owner: water, sewer, trash, gas, electricity and internet for the rental. If tenants pay their own utilities, there's nothing here.
Line 18: Depreciation expense or depletion
The annual deduction that recovers the cost of the building and improvements over time. Land is not depreciable. Residential rental property is generally depreciated over 27.5 years. For example, if the building portion of your purchase (excluding land) is $200,000, a full year of straight-line depreciation is $200,000 ÷ 27.5 = $7,272.73. The first and last years are smaller because of the mid-month convention. You figure the amount with Form 4562 and its instructions; this is a line where a tax preparer earns their fee.
Line 19: Other (list)
Ordinary and necessary rental expenses that don't fit lines 5–18, listed with a description: HOA dues, bank fees on the rental account, rental software, tenant screening costs you don't pass on, rental license or inspection fees.
Lines 20 and 21
Line 20 is the total of lines 5 to 19. Line 21 is rents (and royalties) minus total expenses: your rental income or loss before any limits on losses, which the instructions explain.
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Repairs vs improvements
This distinction matters because a repair is generally deducted in the year you pay it, while an improvement is generally capitalized and depreciated over many years.
| Usually a repair (line 14) | Usually an improvement (depreciated) |
|---|---|
| Fixing a leaking faucet | Replacing all the plumbing |
| Patching a section of roof | Replacing the entire roof |
| Repainting a room | Adding a room or a bathroom |
| Replacing a broken window pane | Replacing an entire HVAC system |
| Fixing a broken appliance | Major renovation before renting |
The IRS describes improvements as amounts paid to better or restore the property or adapt it to a new use. There are safe harbors and elections that can change the treatment of some smaller items, so log anything large or borderline in its own "improvements" category and let your tax preparer decide.
A worked year for one rental
A made-up single-family rental, with the year's bookkeeping totals mapped to Schedule E lines:
| Line | Category | Amount |
|---|---|---|
| 3 | Rents received | $26,400.00 |
| 5 | Advertising | $85.00 |
| 7 | Cleaning and maintenance | $1,140.00 |
| 9 | Insurance | $1,620.00 |
| 10 | Legal and other professional fees | $450.00 |
| 12 | Mortgage interest paid to banks | $9,860.00 |
| 14 | Repairs | $1,315.00 |
| 15 | Supplies | $212.00 |
| 16 | Taxes | $3,480.00 |
| 19 | Other: bank fees | $60.00 |
| 18 | Depreciation | $7,272.73 |
| 20 | Total expenses | $25,494.73 |
| 21 | Income | $905.27 |
Notice how depreciation changes the picture: before depreciation, rents exceed expenses by $8,178.00, but after a full year of depreciation the taxable result is $905.27. Depreciation is a non-cash deduction: no money leaves your account, but it lowers taxable income. (When you sell, depreciation you took or could have taken generally affects your taxable gain, which is another reason to keep good records.)
What doesn't go on Schedule E
A few things landlords often try to deduct that don't belong on these lines:
- Principal payments on the mortgage (they reduce the loan, not income).
- The cost of improvements in the year paid (they're generally depreciated instead).
- The value of your own labor on the property, which the instructions specifically exclude.
- Personal expenses. If you rent out only part of your home, only the rented part's share of shared expenses generally belongs here.
- Security deposits you'll return, which aren't income in the first place.
Practical tips
- Track per property. Schedule E has a column per property (A, B, C), so keep your records by property from the start.
- Use a "Portfolio" bucket for costs shared by several properties, then allocate them.
- Keep improvements separate, with dates and amounts. You'll need them for depreciation and when you sell.
- Watch personal use. If you or family use the property part of the year (common with vacation rentals), special rules can limit what you can deduct. Line 2 of the form (fair rental days and personal use days) deals with this.
- Keep the evidence: receipts, invoices, bank statements, Forms 1098, property tax bills and closing statements.
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Line numbers and descriptions are based on the 2025 Schedule E and its IRS instructions. This guide is general information, not tax advice.
Frequently asked questions
What expense categories are on Schedule E?
Lines 5 to 19 of Schedule E Part I cover advertising, auto and travel, cleaning and maintenance, commissions, insurance, legal and other professional fees, management fees, mortgage interest paid to banks, other interest, repairs, supplies, taxes, utilities, depreciation expense or depletion, and other.
Where do HOA fees go on Schedule E?
Schedule E has no dedicated HOA line, so regular HOA dues on a rental are commonly listed on line 19, Other, with a description. Ask your tax preparer how they want them reported.
Can I deduct the full cost of a new roof on my rental?
Generally not in one year. The IRS treats replacing a roof or an entire HVAC system as an improvement that must be capitalized and depreciated, while fixing a leak or a broken lock is a deductible repair. A tax professional can tell you whether any exceptions apply.