What documents do landlords need to prepare for taxes?
Having the right documents and records ready can make filing your year-end tax return more efficient. As a rental property owner, gather the following records:
- Prior years’ tax records.
- Tenant leases.
- Property titles or deeds.
- Legal documents, such as incorporation records and inspection reports.
- Business insurance policies.
- Receipts for rent payments.
- Records of security deposits.
- Documentation of expenses (marketing, mortgage interest, repairs, maintenance, landlord-provided utilities, service fees, office expenses, etc.)
- Payroll expenses if you have employees or independent contractors.
- Business travel expenses.
What are the important tax deadlines for landlords?
Landlords who make estimated quarterly tax payments typically have four due dates each year, generally in April, June, September, and January of the following year.
Exact dates can vary from year to year, so it’s best to confirm current deadlines directly on the IRS website.
Depending on your business structure and whether you have employees or independent contractors helping with property management, there may be additional filing or payment deadlines.
Can landlords deduct losses related to missed rent payments by tenants?
It depends on how you report income and expenses:
- Accrual basis: You report income and expenses when they are due. Under this method, you may be able to deduct uncollected rent.
- Cash basis: You report income when you actually receive it and expenses when you pay them. The IRS does not allow a deduction for uncollected rent under the cash method.
You may, however, be able to deduct related expenses, such as legal fees incurred in trying to collect unpaid rent.
Does forming a business entity make taxes easier for landlords?
Creating a separate business entity—such as an LLC or corporation—for your rental property can help keep business and personal income separate. It may also provide liability protection and potential tax advantages, depending on the entity type.
If you change your business type in the middle of a tax year while operating your rental property business and earning income, you may need to file two separate tax returns for your business in that year.
If you’re considering forming a business entity or changing your business structure, you may want to consult a Legal Pro or financial advisor to understand how this affects your taxes and compliance obligations.
Please note: This page offers general legal information, not but not legal advice tailored for your specific legal situation. Rocket Lawyer Incorporated isn't a law firm or a substitute for one. For further information on this topic, you can Ask a Legal Pro.
