Deducting Local Travel Expenses

Managing rental properties often requires frequent local travel. Whether you're driving to visit a property, meeting with your tenants, or purchasing miscellaneous supplies, these trips can add up in both time and money. Thankfully, the IRS allows you to deduct travel expenses incurred for business purposes, offering you significant tax savings.

This article discusses how to deduct travel expenses on taxes as a landlord and what qualifies as a deductible expense. We will also explore how to deduct travel expenses, and how this deduction can reduce your tax liability while keeping your rental business profitable.

What Is the Travel Expense Deduction?

The travel expense deduction is a tax benefit that allows landlords to deduct costs associated with using your vehicle or other forms of transportation for business-related activities. For property owners, this includes trips necessary to manage, maintain, or improve rental properties. The deduction offsets the costs of operating a vehicle or using public transportation to conduct essential rental property tasks. For example, traveling to show a rental unit, to collect rent, or to oversee repairs all qualify as deductible travel expenses.

Local travel differs from long distance travel, though. Meal expenses as well as airport or train station tickets wouldn’t be relevant or necessary for local travel and may be considered disallowed business expense deductions.

Below is a list of expenses that do and don’t qualify according to the IRS:

Qualifies:

• Mileage for driving to rental properties
• Trips to purchase supplies or meet vendors
• Travel to attend property-related legal or financial meetings

Does Not Qualify:

• Personal travel, even if it occurs during the same trip as a business-related activity
• Travel from home to your first rental property location, as this is considered a personal commute (unless you have an IRS-compliant home office)

For instance, imagine that you drive 20 miles round trip to your business destination to inspect a property. Using the 2025 IRS mileage rate of 70 cents per mile, you can calculate the tax-deductible expense as follows:

1. Determine the total miles driven: Round trip = 20 miles.
2. Multiply the total miles by the mileage rate: 20 miles x 0.70 (cents per mile) = 14.00.

Therefore, your total deductible expense for this trip would be $14.00.

Understanding what qualifies for the deduction ensures you capture all eligible business expenses while staying compliant with tax laws.

How to Qualify for the Local Travel Expense Deduction

The IRS requires that all travel expenses be directly related to your rental business. To qualify for the deduction, there is a list of rules you must follow.

First, the trip must be exclusively for business purposes. If a trip combines business and personal activities, you can only deduct the expenses for services related to your rental property. For example, if you visit a property and then run personal errands, only the mileage to and from the property qualifies.

Frequent trips to maintain or manage your property, such as weekly checks or visits to repair issues, qualify as fair use. However, travel for irregular or non-essential purposes may not meet IRS requirements.

Additionally, you must maintain detailed records of your trips, including:

• Date of the trip
• Purpose of the trip
• Miles driven (or public transportation cost)
• Receipts for parking fees, tolls, or other associated costs

Following these guidelines ensures your business travel expenses qualify for deduction and protects you during an audit.

Calculating the Local Travel Expense Deduction

You can calculate your travel expense deduction using one of two methods. You can use the standard mileage rate or deduct actual expenses, both approved by the IRS.

The IRS sets an annual mileage rate to simplify the calculation of deductible vehicle expenses for business purposes. In 2024, the standard mileage rate was 67 cents per mile. In 2025, this rate has increased to 70 cents per mile. To determine your deduction, multiply the number of miles driven for business trip purposes by the applicable rate, then divide by 100 to get the dollar amount.

For example, if you drive 5,000 miles in a year and 2,000 of those miles are for rental property management, you can deduct 40% of your total vehicle expenses using the actual expense method. Additionally, with the 2025 standard mileage rate of 70 cents per mile, you would multiply 2,000 miles by 70 cents, resulting in a deduction of $1,400.

Claiming the Travel Expense Deduction

To claim your travel expense deduction, it’s important to follow IRS guidelines, use the correct tax forms, and report your expenses accurately. Proper documentation and careful calculations are vital to ensuring that your deduction is accepted without issues.

Travel expenses related to managing your rental properties should be reported on Schedule E (Form 1040). This form is specifically designed to report the income and expenses of rental properties, ensuring that your tax return clearly reflects your business activities. Under the “Expenses” section of Schedule E, you’ll include mileage or other vehicle-related costs incurred during property management tasks. If your travel expenses involve additional costs, such as parking fees, tolls, or public transportation costs, these can be itemized separately under “Other Expenses.” For example, if you pay $100 in tolls while driving to multiple properties throughout the year, this amount should be included under this section to maximize your deduction.

The IRS requires detailed records to support any travel-related deduction. Maintaining a mileage log is one of the most reliable ways to document your business-related trips. This log should include:

• The date of each trip
• The purposes of the trips (e.g. inspecting a rental property)
• The starting and ending locations
• The total miles driven

Below is an example log as a table:

Date	Purpose of Trip	Starting Location	Ending Location	Miles Driven
01/05/2025	Inspecting rental property	123 Main St.	456 Elm St.	15 miles
01/12/2025	Meeting contractor	123 Main St.	789 Pine St.	20 miles
01/20/2025	Purchasing supplies	123 Main St.	Hardware Store	10 miles

Receipts for tolls, parking fees, or other incidental travel costs should also be retained and organized. These documents provide proof of your expenses and align your reported figures with actual costs, reducing the likelihood of errors or audit concerns.

By following IRS requirements, keeping thorough documentation, and accurately reporting your expenses on Schedule E, you can confidently claim the travel expense deduction and reduce your taxable rental income.

How Much Can I Save With the Travel Expense Deduction?

The amount you save depends on your travel habits and total expenses incurred for rental property management.

Landlords often drive hundreds of miles annually to manage their properties. With the standard mileage rate, even short trips can add up to significant tax deductions. For example, if you drive 3,000 miles in a year for rental-related purposes and use the 2025 mileage rate of 70 cents, your business travel deductions will amount to $2,100. If you’re in the 24% tax bracket, this deduction reduces your tax liability by $504 ($2,100 x 0.24).

Deducting travel expenses lowers your taxable income, freeing up cash flow to reinvest in your rental business or cover other expenses.

Understanding how to deduct travel expenses highlights the financial benefits of keeping detailed records and tracking your mileage.

Maximize Your Savings with the Travel Expense Deduction

The ability to deduct travel expenses is a helpful tool for property owners managing rental properties. By tracking your mileage, maintaining accurate records, and understanding how to deduct travel expenses on taxes, you can significantly reduce your taxable income.

Whether you choose the standard mileage rate or actual expense method, careful planning and accurate reporting on Schedule E ensure you make the most of this deduction. Consult IRS resources or a tax professional to maximize your savings and stay compliant with tax regulations.