Rental Property Expense Categories: The 15 Schedule E Lines Explained
If you keep your landlord books in the same categories the IRS uses on Schedule E, year-end is mostly copying totals. Below are the expense lines from Schedule E, Part I, what usually belongs on each, and a calculator that adds up your year.
Calculator
- Cash expenses (excl. depreciation)
- –
- All expenses incl. depreciation
- –
- Rent minus cash expenses
- –
Example figures are made up for illustration. Loss limits (passive activity, at-risk) can apply; see Pub. 527 chapter 3.
The Schedule E expense lines
Schedule E (Form 1040), Part I is where most individual landlords report rental income and expenses for each property. The expense lines are:
| Line | Category | Examples of what goes here |
|---|---|---|
| 5 | Advertising | Listing-site fees, signs, ads for a vacancy |
| 6 | Auto and travel | Mileage or actual car costs to collect rent or maintain the property; travel away from home whose main purpose is managing the rental (see our mileage page) |
| 7 | Cleaning and maintenance | Turnover cleaning, lawn care, pest control |
| 8 | Commissions | Leasing or tenant-placement commissions |
| 9 | Insurance | Landlord/fire policy for the year (prepaid multi-year premiums are spread over the years covered) |
| 10 | Legal and other professional fees | Lease review, eviction attorney, tax prep for the Schedule E part |
| 11 | Management fees | Property manager's monthly percentage |
| 12 | Mortgage interest paid to banks, etc. | Interest from Form 1098 (interest only, never principal) |
| 13 | Other interest | Interest on other loans used for the rental |
| 14 | Repairs | Fixing what's broken without bettering, restoring or adapting the property (see repairs vs improvements) |
| 15 | Supplies | Light bulbs, smoke-alarm batteries, cleaning supplies |
| 16 | Taxes | Property tax on the rental |
| 17 | Utilities | Utilities you pay as the landlord |
| 18 | Depreciation expense or depletion | Yearly depreciation of the building and improvements (see the depreciation calculator) |
| 19 | Other | HOA/condo dues for maintenance of common areas, equipment rental, other ordinary and necessary costs (list them) |
The examples column is our plain-English summary; the official wording is in the Schedule E instructions linked below.
Three rules that trip people up
- Mortgage principal is not an expense. Pub. 527 says you can't simply deduct mortgage or principal payments; the building's cost is recovered through depreciation instead.
- Improvements aren't repairs. An expense that results in a betterment, restoration, or adaptation of the property must be capitalized and depreciated.
- Insurance paid in advance is spread. If you pay a premium for more than one year in advance, you deduct only the part that applies to each year.
How to set up your bookkeeping categories
Use exactly these line names as the category list in your spreadsheet or bank-feed rules, one column per property. Two extra non-expense columns help: capital improvements (to depreciate later) and security deposits held (not income while you plan to return them). At year-end, a pivot by line number gives you each Schedule E figure.
Quick answers
What expense categories does Schedule E use for rental property?
Lines 5 to 19 of Schedule E, Part I: 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, and other.
Can I deduct my mortgage payment on a rental?
Only the interest part (line 12). IRS Publication 527 says you can't deduct mortgage principal payments; the building cost is recovered through depreciation.
Keep landlord books in these categories
Our rental spreadsheets use Schedule E-style expense categories (you can rename them), track security deposits separately from income, and total everything per property: