Homeowners Association Fees

• HOA fees are one of the most confusing tax deductions for landlords. Since these fees are collected by a private source, the association, they are only deductible for the percentage of the year that the property is rented or available for rent. They are considered an expense of doing business and are a direct offset against profits earned from renting the property out. This differs from the tax treatment by an individual who owns a home for personal use. If the home is used for personal use, then the HOA payments are not deductible, per the Internal Revenue Service Publication 530.
  
  

Interest and Property Taxes

• Interest paid on the property mortgage, along with property taxes paid to local government agencies, are deductible for both landlords and private homeowners. What the landlord may forget to claim, though, is the interest paid on credit cards that are used to purchase goods and services related to maintaining and renting the property out. While credit card interest may seem inconsequential from month to month, it can add up to a modest deduction by year-end.
  
  

Travel

• By keeping meticulous records of your local and overnight travel related to the rental business, you can deduct rental-car expenses, mileage or the cost of actual gas, maintenance and repairs, hotel costs, air-travel costs and certain meals. The standard mileage rate for 2011 is $.51 a mile, but each year the IRS adjusts that rate. Keep copies of receipts, dates and the purpose of the travel, in preparation of a potential audit.
  
  

Employees, Professionals and Contractors

• Fees paid for attorneys, accountants and property-management companies are deductible as professional expenses as long as the services are related to the business. Wages, taxes and benefits paid to employees are deductible, as well as fees paid to independent contractors, such as a plumber, lawn-care service or painter. Remember to include the costs of maid service and carpet cleaners hired to clean up after a tenant moves out.
  
  

Repairs, Losses and Insurance

• Repairs needed to keep the property in good condition, as well are repairs caused by casualty and theft are tax deductible. Remember to offset the cost of the repair or replacement of a loss by the amount your insurance company may have paid. The difference, or the unreimbursed amount, between what the insurance company paid and the cost to bring the property back to good working order is the amount that can be deducted. The insurance premiums are also tax deductible.