3 Easy Ways Landlords Can Save on Taxes in 2025

By Sue Richey

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Tax season is here, and I know it’s not the most exciting time of year. The good news is you don’t have to dread it. You can save a lot of money by taking advantage of a few key tax tips for landlords. Let me share with you the three best ways to reduce your tax bill this year:

1. Take advantage of bonus depreciation. Bonus depreciation is a powerful tool that can help you save money on taxes. It lets you deduct a large percentage of capital improvements, like new appliances or renovations, in the same year you make them.

In the past, landlords could deduct up to 80% of capital improvements. In 2025, that number has dropped to 60% and will continue to decrease in the coming years. If you’re planning any big purchases or improvements, now is the time to act. The sooner you make the improvements, the more you can save.

For example, if you bought new energy-efficient appliances for your rental property and the total cost was $5,000, with a 60% bonus depreciation, you could deduct $3,000 from your taxable income. This lowers your overall tax bill and puts more cash in your pocket to reinvest in your property or other investments.

2. Don’t miss the energy-efficient home improvement credit. If you’ve been thinking about upgrading your property, now is the time to go green. In 2025, the IRS will reward landlords for making energy-efficient upgrades like installing solar panels, new windows, or better insulation.

This credit can cover up to 30% of the cost of these upgrades. Not only does this save you money on taxes, but it also makes your property more attractive to eco-conscious tenants. Energy-efficient properties are in demand, and you can use that to your advantage while lowering your taxes.

3. Understand the qualified business income (QBI) deduction. The QBI deduction can be a game-changer for many landlords. If your rental activity qualifies as a business, not just a passive investment, you can deduct up to 20% of your net rental income. This deduction can make a huge difference in your tax bill, especially if you’re hands-on with managing your property.

To qualify, you need to keep detailed records of your time spent on property management. Things like maintenance, tenant communication, and bookkeeping count. For example, if your rental income is $50,000, you could deduct $10,000 from your taxable income. That’s real money in your pocket.

Tax season doesn’t have to be stressful. With these three tips, you can save serious money this year. Make sure to consult with a tax advisor, as they can provide you with advice that could save you more money than you pay for it. If you have any questions, feel free to call or text me 703-471-4800 at or email me at info@richeypm.com.