How to use it
Log each transaction when it happens, with the property and a category from the summary. Keep the receipt or invoice reference in the description. At the end of the year, total each category per property and copy the totals into the matching Schedule E lines, one column per property.
Record income when received, including rent paid in advance and fees the tenant pays you. A security deposit you expect to return is not income; it becomes income only if you keep it.
Repairs versus improvements
A repair keeps the property in its normal working condition and is deducted in the year it is paid. An improvement, such as a new roof or a kitchen renovation, adds value or extends the property’s life and is depreciated over time instead. The rental property depreciation calculator works out the yearly amount for the building and for improvements.
Short-term rentals and personal use
If you also use the property yourself, expenses generally have to be split between rental and personal days, and very short average stays can change how the income is reported. Airbnb host tax deductions covers the common cases; ask a tax professional about yours.
When a spreadsheet stops being enough
A spreadsheet works for one or two properties you manage yourself. Once you manage for owners, or the same payment covers several properties, a ledger that tags each transaction with its property and owner saves rebuilding the year from bank lines. Property accounting software does that, and the rental property accounting checklist lists what your books need to get right.
Common questions
What categories should a rental expense spreadsheet use?
The IRS Schedule E categories are a practical choice for US landlords: advertising, auto and travel, cleaning and maintenance, commissions, insurance, legal and professional fees, management fees, mortgage interest, other interest, repairs, supplies, taxes, utilities, depreciation and other.
Is a security deposit rental income?
Not if you expect to return it. It becomes income if you keep it, for example to cover unpaid rent or damage.
Can I deduct improvements in one year?
Generally no. Improvements are depreciated over their recovery period, while ordinary repairs are deducted in the year they are paid.
Do I need one spreadsheet per property?
One log with a property column works, as long as the annual summary totals each property separately, because Schedule E reports each property in its own column.
Done by hand once. Done automatically from now on.
Tag every rent payment and expense with its property and owner as it happens, so the year-end totals are a report, not a reconstruction.