HomeBlogPersonal FinanceInvestment Property Tax Deductions Missouri Owners Miss Share on Like what you see? Share with a friend. Investment Property Tax Deductions Missouri Owners Miss Chris Kirshenboim | January 6, 2025 Last updated August 10, 2026 Most owners deduct the mortgage interest and the obvious repairs, then stop. The investment property tax deductions that get left on the table are the unglamorous ones: premiums on the landlord policy, casualty losses the insurer did not cover, mileage driving out to the property, the fee you pay a bookkeeper or a property manager, legal costs from an eviction, and depreciation on the building itself spread across 27.5 years. Depreciation is the large one, and it is the one owners forget they claimed until the year they sell. Rental property tax deductions in Missouri follow the federal rules closely, so the state return adds little beyond what you have already calculated. Keep the receipts and take all of it to a tax professional before you file, because none of this is advice about your particular return. The part worth planning for is the exit. Depreciation recapture and capital gains land in the same tax year as the sale, which is why the timing of a sale can matter as much as the price. If you are weighing whether to keep collecting rent or be finished with the property, our guide on how to sell a rental property walks through both sides, and you can read how we buy houses if selling is where you are heading. Table of Contents5 Overlooked IRS Tax Deductions for Investment Property in MO1. Insurance Premiums2. Casualty and Theft Losses3. Independent Contractors4. Home Office5. Local Travel ExpensesLegal and Professional ServicesLOOKING TO DO A DEAL IN MO? CONTACT US TODAY FOR POSSIBLE PARTNERSHIPS! Be sure to maintain good records, keep all receipts and discuss all deductions with your tax advisor. Tax laws change frequently and should be reviewed annually. 5 Overlooked IRS Tax Deductions for Investment Property in MO 1. Insurance Premiums Insurance on investment properties is often more expensive than on personal properties because of the higher business exposure for loss. Unlike personal insurance premiums that cannot be deducted, investment property insurance premiums are deductible. Deductible premiums include those paid for property, liability, and flood and earthquake insurance. If you have regular employees who manage or maintain the property, you must also carry workers compensation, which is deductible too. 2. Casualty and Theft Losses Speaking of losses, you can deduct those as well. There is one caveat: you can only deduct an amount over what the insurance company doesn’t pay. For example, assume you have a 10% deductible on the investment property and a fire burns it to the ground. If the value of the claim is $250,000, your deductible is $25,000. You can claim the $25,000 as a tax deduction. 3. Independent Contractors When keeping investment properties maintained, it is an easy trap to find the cheapest help to do odds and ends work. Often these handymen get paid cash. While this may save you a few bucks in ongoing maintenance and repairs, it doesn’t help with tax deductions. Any independent contractors that invoice you or provide a receipt become a deductible expense. Keep good records and pay with a business check to have further proof of this type of deduction. 4. Home Office Most investment property owners don’t maintain a business office. If you did, that is certainly deductible. However, if you don’t, you are still able to deduct your home office. The IRS allows you to deduct space per requirements of dedicated use, meaning your kids don’t also do their homework at the desk. But if you have a dedicated space with a desk, computer, files, and other related items, you can deduct this. 5. Local Travel Expenses How often are you going to and from the property, running to the home improvement store to get materials or stopping at the bank to make deposits? These are all business related activities and not part of your normal daily activities making them deductible as local travel expenses. Keep a mileage log and any receipts for gas, maintenance, and repairs on your vehicle. At the end of the year, determine if the standard mileage deduction or actual expense save you more money and take the appropriate deduction. Legal and Professional Services Don’t forget to deduct any legal and professional service costs you incur. It is common for property owners to deduct management company expenses, but don’t always consider the legal expenses for lease review, court costs for evictions and bookkeeping and accounting costs. All of these are deductible from property revenue. In fact, knowing these are deductible expense may sway you to actually employ the services of these professionals. Using professionals in these areas frees up your time to spend on the investment property and other things while you also can sleep better knowing these important things are handled properly. Professionals protect you and protect your assets. LOOKING TO DO A DEAL IN MO? CONTACT US TODAY FOR POSSIBLE PARTNERSHIPS! FAQs Frequently Asked Questions Can I deduct repairs and improvements the same way? + No. A repair that keeps the property in working order is deductible in the year you pay for it. An improvement that adds value or extends the life of the building is capitalized and depreciated over time instead. What happens to depreciation when I sell the rental? + The IRS recaptures it. Depreciation claimed over the years gets taxed as income in the year of the sale, on top of any capital gain, so plan the sale year with your accountant rather than after the fact. Can I sell a rental with tenants still in the house? + Yes, and it does not have to be complicated. The lease transfers with the property, deposits move to the new owner at closing, and our team buys rentals with tenants still in the house on their existing terms.
