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Are Repair Expenses and Management Fees Tax Deductible?

In many cases, yes repair expenses and management fees are commonly deductible for rental properties.

Audience: property owners who want to understand how common rental expenses like repairs and management fees are typically treated for tax purposes.

However, how they’re deducted and when depends on tax rules and how the expense is classified.

Here’s a clear, practical breakdown.

FAQs

Are repairs always deductible?
Many repairs are, but some costs may need to be capitalized instead.

Are management fees deductible?
Commonly yes, as an operating expense.

Does MoveZen decide what’s deductible?
No. MoveZen provides records; your tax professional determines treatment.

Do deductions appear directly on my 1099?
No. Deductions are applied using your statements, not your 1099. Your 1099 will include all the income collected on your behalf during the tax year.

Management Fees: How They’re Typically Treated

Management fees are generally considered:

  • Ordinary operating expenses

  • Directly related to rental activity

Because of this, they are commonly deducted in the year incurred subject to your tax professional’s guidance.

Your Cash Flow Statement clearly itemizes these fees for easy reference.

Repair Expenses vs. Improvements 

This distinction matters.

Repairs

Repairs generally:

  • Fix or maintain existing items

  • Restore functionality

  • Do not significantly extend useful life

Examples:

  • Fixing a leak

  • Replacing a broken component

  • Minor electrical or plumbing work

These are often deductible as current expenses.

Improvements

Improvements typically:

  • Add value

  • Extend useful life

  • Upgrade the property

Examples:

  • Full roof replacement

  • HVAC replacement

  • Major renovations

These are often capitalized and depreciated over time.

Why Accurate Descriptions Matter

Clear repair descriptions help your tax professional:

  • Classify expenses correctly

  • Separate repairs from improvements

  • Apply deductions appropriately

MoveZen’s cash flow and owner statements include descriptions to support this process.

How Expenses Appear in Your Records

Your Cash Flow and Owner Statement shows:

  • Repair and maintenance expenses

  • Management fees

  • Dates and amounts

Your 1099 shows:

  • Gross income only

Using both together gives the full tax picture.

Timing Considerations 

Expenses are generally:

  • Deducted in the year incurred or paid

  • Matched against income for that year

Prepaid rent and timing differences may require adjustments.

What MoveZen Does — and Doesn’t Do 

MoveZen does:

  • Track expenses accurately

  • Provide clear documentation

MoveZen does not:

  • Decide deductibility

  • Offer tax advice

  • File tax returns

This separation keeps everything compliant.