Landlords’ Guide to the 2026 Tax Season: What Do You Need to Know?
Key Takeaways
- Several landlord tax changes for 2026, including permanent bonus depreciation and expanded deductions, may significantly impact how rental income is taxed.
- Many landlord tax basics will remain unchanged in 2026, such as reporting rental income on Schedule E and deducting ordinary operating expenses.
- Record-keeping and tax preparations are important for landlords to maximize their deductions and to prevent legal penalties.
- Being aware of tax deadlines and thresholds adjusted for inflation helps landlords remain compliant throughout the tax season.
The 2026 tax season brings several important updates for landlords, including permanent changes to depreciation rules, expanded deductions, and inflation-adjusted thresholds. At the same time, many other landlord tax rules remain unchanged. Understanding what’s new and what still applies helps rental property owners prepare accurately, maximize deductions, and stay compliant this tax season—especially as us property tax changes and broader economic policy debates keep real estate taxation at the forefront.
In this article, we dive into everything you need to know to tackle the 2026 tax season: From landlord tax changes 2026 to deadlines and best practices.
What’s New for Landlords in the 2026 Tax Season
For tax season, multiple landlord tax changes 2026 have gone into effect due to legislation and inflation that are relevant to current landlords and rental property owners.
One Big Beautiful Bill Act
One of the biggest developments is the federal One Big Beautiful Bill Act (OBBBA), signed into law on July 4th, 2025, which made permanent many provisions originally scheduled to expire and introduced new benefits for real estate investors and property owners (often summarized as One Big Beautiful Bill Act tax law changes). For many landlords, these are massive tax changes compared to prior expectations.
Bonus Depreciation
Additionally, under the new landlord tax changes 2026 law, 100% bonus depreciation, which allows landlords to immediately deduct the full cost of qualifying property placed in service, has been reinstated permanently instead of phasing out as previously planned. This can accelerate depreciation deductions for qualifying assets such as appliances, furniture, and other improvements put in service after January 19th, 2025. Further, the 20% Qualified Business Income deduction, which can reduce taxable income from eligible rental real estate activities, has been made permanent and expanded with higher phase-in thresholds.
Standard Deduction Inflation Adjustments
According to the IRS, tax brackets and the standard deduction are adjusted for inflation for the 2026 tax year. For example, the standard deduction rises to $32,200 for married couples filing jointly and $16,100 for single filers, slightly reducing taxable income for many taxpayers compared with prior years (note this if you’re comparing your taxes 2025 with your 2026 filing).
The OBBBA temporarily increases the state and local tax (SALT) deduction cap from the prior $10,000 limit to approximately $40,000 in 2026 for taxpayers with adjusted gross incomes under $500,000, benefiting landlords in states with higher taxes. This SALT shift has become a hot topic among homeowners and rental owners alike, particularly where property taxes drive higher bills.
Low-Income Tax Credit Allocations
Finally in 2026, Low-Income Housing Tax Credit allocations to states are increasing from 9% to 12%, potentially encouraging more affordable rental housing development. While this change impacts developers and investors broadly, landlords involved in affordable housing projects may benefit indirectly through increased supply and investment incentives. In many states, lawmakers and politicians are also pairing federal incentives with new real estate laws at the state and local level.
Landlord Tax Basics & What Hasn’t Changed
While many tax laws have changed due to the OBBBA signed into effect last July, many of the basic landlord tax rules are unchanged for the 2026 tax season. Knowing these basic rules will come in handy for accurately filing your taxes and maximizing your deductions.
Reporting Rental Income
Landlords must continue to report all rental income that exceeds $600 during the tax year, regardless of whether the payment was made by check, cash, or electronic transfer. Rental income generally includes monthly rent payments, advance rent, and certain tenant-paid expenses. Security deposits are not considered income unless they are kept to cover unpaid rent or damages.
Rental income is typically reported on Schedule E (Form 1040) for individual landlords.
Common Rental Property Deductions
Many of the most important rental property tax deductions remain unchanged in 2026. Landlords can generally deduct ordinary and necessary expenses related to operating and maintaining a rental property. According to the IRS, common deductions include:
- Repairs and routine maintenance
- Property management fees
- Mortgage interest
- Property taxes
- Insurance premiums
- Utilities paid by the landlord
- Advertising and leasing expenses
- Legal or accounting fees
- etc.
These deductions reduce taxable rental income and remain a cornerstone of landlord tax strategy.
General Depreciation Rules
Depreciation rules for rental properties have not fundamentally changed for 2026. Residential rental property is still depreciated over 27.5 years using the Modified Accelerated Cost Recovery System (MACRS). Landlords may depreciate the building and certain improvements, but land value cannot be depreciated.
Depreciation starts as soon as a property is placed in service and continues annually, even if the property increases in market value. Understanding depreciation is necessary for long-term tax planning and accurate reporting.
Rental Property Tax Deductions to Prioritize in 2026
With rental operating costs still elevated and margins under pressure, prioritizing the most impactful rental property tax deductions is especially important for the 2026 tax season, keeping in mind the landlord tax changes 2026. While the rules for these deductions haven’t significantly changed, their value has increased as expenses and interest costs remain high and as local property taxes rise in parts of the U.S.
Maintenance & Repairs
Maintenance and repair expenses remain fully deductible in the year they’re incurred, as long as the work keeps the property in good operating condition and does not materially improve or extend its useful life. Common deductible repairs include fixing plumbing issues, patching roofs, repainting, replacing broken fixtures, and servicing HVAC systems.
Distinguishing repairs from improvements is always necessary. Improvements are things like major renovations or system replacements, and they must generally be capitalized and depreciated over time rather than deducted immediately.
Mortgage Interest & Insurance
Mortgage interest continues to be one of the largest deductions available to landlords in 2026, particularly as interest rates remain higher than pre-pandemic levels. Landlords can deduct interest paid on loans used to purchase, improve, or refinance rental properties.
In addition, insurance premiums for rental properties remain deductible. This includes landlord insurance, liability coverage, flood insurance, and other policies related to protecting the property and rental activity.
Home Office
Landlords who manage their rental business from home may still qualify for the home office deduction in 2026. To be eligible, the space must be used regularly and exclusively for managing rental activities, such as bookkeeping, tenant communication, or maintenance coordination.
Qualifying landlords may deduct a portion of expenses like rent or mortgage interest, utilities, internet, and home insurance based on the size of the home office relative to the total living space. The simplified method is based on square footage, and remains available as an alternative to detailed expense tracking.
2026 Tax Season Preparation Tips
Preparing early for the 2026 tax season helps landlords reduce errors, capture every eligible deduction, and stay compliant with landlord tax changes 2026. With updated depreciation rules, inflation-adjusted thresholds, and evolving reporting requirements, proactive planning is more important than ever—especially as real estate taxation stays at the forefront of national economic policy discussions.
Organize Your Records Year-Round
Accurate, well-organized records are step one of landlord tax prep. Landlords should track all rental income and expenses throughout the year, including receipts, invoices, mileage logs, and bank statements. Digital records can simplify documentation and make it easier to substantiate deductions if audited.
At Ledgre, we can make your landlord bookkeeping simple by automatically tracking rental income and expenses in one place. If you’re looking for tools to help you stay organized year-round, reach out to get started.
Review Depreciation & Assets Carefully
With 100% bonus depreciation restored for qualifying property in 2026, landlords should review any assets placed in service during the year, such as appliances, equipment, or certain improvements. Properly categorizing assets can significantly affect deduction timing and tax liability.
For 2026, confirm which assets qualify for bonus depreciation opposed to standard MACRS depreciation, and ensure placed-in-service dates are documented accurately.
Reevaluate Eligibility for the QBI Deduction
Many landlords may still qualify for the QBI deduction, but eligibility depends on factors such as income level, activity classification, and participation. Reviewing rental activity structure annually can help determine whether the deduction applies.
Income thresholds and phase-outs are adjusted for inflation under the landlord tax changes 2026, so landlords who did not qualify in prior years may now be eligible, or vice versa.
Work With a Tax Professional
Tax rules affecting landlords can be complex, especially with recent changes to depreciation, deductions, and income thresholds. Consulting a tax expert for expert help can help landlords apply new rules correctly and identify planning opportunities specific to their portfolios. This is particularly useful for landlords with multiple properties, mixed-use buildings, or recent acquisitions or renovations.
Deadlines for the 2026 Tax Season
Missed or late filings for the 2026 tax season will result in penalties and interest accrued for landlords. While most filing dates remain consistent year to year, landlords should pay close attention to income reporting and estimated payment deadlines.
For most landlords filing individual returns, the federal tax filing deadline for the 2026 tax season (covering 2025 income) is April 15th, 2026. This is the deadline to file Form 1040 and Schedule E, and is also the deadline to request an extension.
Landlords who need more time for their landlord tax prep may file Form 4868 to receive an automatic six-month extension to file, moving the deadline to October 15, 2026. However, an extension to file is not an extension to pay, and any taxes owed must still be paid by April 15 to avoid penalties.
Landlords operating through pass-through entities should be aware of additional deadlines, such as:
- March 16th, 2026: This is the deadline for partnerships and S corporations to file returns
- April 15th, 2026: This is the deadline for single-member LLCs and sole proprietors filing with Form 1040
Entity deadlines may affect when landlords receive Schedule K-1 forms needed to complete individual returns.
Remember that state and local filing deadlines may differ from federal deadlines and can include additional requirements for rental income reporting. Landlords should verify deadlines with their state tax authority—especially in jurisdictions implementing new real estate laws, us property tax changes, or broader property tax reform.
Conclusion
The 2026 tax season is a time of both new opportunities and familiar responsibilities. While updated rules around depreciation, deductions, and income thresholds may affect how you report your rental income, the fundamentals of landlord tax prep remain the same. By staying informed, keeping accurate records, and planning ahead, you can navigate the 2026 tax season with confidence and avoid costly mistakes.
FAQs
What are the biggest landlord tax changes for the 2026 tax season?
The biggest updates are permanent 100% bonus depreciation for qualifying property placed in service after January 19, 2025, a permanent/expanded QBI (20%) deduction, and inflation-adjusted tax brackets and standard deductions (plus a higher SALT cap for many taxpayers, depending on AGI).
What rental income do I need to report?
You must report all rental income you receive (rent, advance rent, and certain tenant-paid expenses). Security deposits aren’t income unless you keep them for unpaid rent or damages. Most individual landlords report this on Schedule E (Form 1040).
What deductions should landlords prioritize in 2026?
Focus on high-impact items that are often largest and easiest to substantiate: repairs and maintenance, mortgage interest, property taxes, insurance premiums, management fees, and utilities/advertising/legal/accounting costs tied to the rental.
How does depreciation work for rental property in 2026?
Core rules are the same: residential rental buildings are depreciated over 27.5 years under MACRS, and land isn’t depreciable. The key 2026 planning lever is classifying purchases correctly so eligible assets can use 100% bonus depreciation instead of being spread over multiple years.
What are the key tax deadlines landlords need to know in 2026?
For most individual landlords (2025 income), the federal deadline is April 15, 2026; an extension moves filing to October 15, 2026. Pass-through entities typically file earlier (e.g., March 16, 2026 for partnerships and S corps).