The 2026 Rental Owner Kickoff Guide, Part 3
Tax season may feel far away, but the most profitable rental owners in Billings don’t wait until March or April to get organized. They start preparing in January, because that’s when the smartest financial decisions are made — before the deadlines, the scrambling, and the stress.
And here’s the truth most new rental owners don’t realize:
Your biggest rental property savings aren’t made on April 15…
They’re made in how you organize, track, and plan your expenses all year long — starting now.
If you own a Billings rental property, this guide will show you exactly what to gather, what deductions most landlords forget, how to stay compliant, and how a professional Billings Property Management team makes tax season dramatically easier.
Let’s get you ready the way real investors operate.
Why January Is the Smartest Month to Start Tax Prep
Every year, landlords wait too long to organize their rental documents. By the time their CPA asks for paperwork, they’re digging through email threads, receipts, bank statements, Venmo charges, half-finished depreciation schedules, and maintenance invoices scattered across a dozen platforms.
Starting in January gives you:
A clean financial snapshot of the past year
Time to collect missing documents
Time to ask questions before deadlines
Time to correct bookkeeping errors
A head start on planning this year’s deductible expenses
And most importantly:
You avoid missing the deductions that save you the most money.
Your goal is not just filing taxes.
Your goal is filing taxes in a way that maximizes every legal deduction, minimizes taxable income, and protects your property long-term.
Let’s walk through what landlords need to gather now.
Common Landlord Deductions Owners Forget (But Should Never Miss)
Landlords often underestimate how many expenses qualify as legitimate write-offs. And in Montana, where housing, maintenance, and supply costs have risen, these deductions matter more than ever.
Here are the top deductions we see rental property management Billings MT owners forget every year:
1. Mileage & Travel Related to the Property
Driving to the property?
Meeting contractors?
Picking up supplies?
Those miles are deductible — but only if you track them.
2. Home Office Deduction
If you manage your rentals from home, part of your home expenses may qualify.
Even a small home office deduction impacts your tax bill significantly.
3. Cleaning & Turnover Costs
Anything related to preparing the unit for a new tenant is deductible, including:
Cleaning
Painting
Carpet cleaning
Lock changes
Minor repairs
Advertising
4. Tenant Screening & Leasing Costs
Background checks, application software, and leasing fees are all deductible.
5. Legal & Professional Services
Attorney consultations, bookkeeping, education, software subscriptions — all deductible as long as they support your rental business.
6. Repairs (Not Improvements)
Repairs such as:
Fixing leaks
Patching drywall
Replacing broken fixtures
HVAC repairs
are deductible the same year.
Improvements, like a full kitchen remodel, depreciate — but repairs hit your tax return immediately.
7. Depreciation (The Big One Most Shockingly Forget)
Depreciation is often the largest tax deduction for any Billings rental owner.
If you’re not maximizing depreciation or using a cost segregation study (when appropriate), you are leaving money on the table.
8. Insurance Premiums
Landlord insurance, umbrella policies, and liability coverage qualify.
9. HOA Fees
If your property is in an HOA, those fees are deductible.
10. Property Management Fees
If you use a property manager near me Billings MT, the fees are fully deductible — because property management is a business expense.
Missing even a few of these adds up to hundreds — sometimes thousands — lost unnecessarily.
Documents Every Billings Landlord Should Gather Now
Your CPA is going to ask for a detailed set of financial records. Gathering these in January prevents surprises later.
Here’s the complete list:
1. Mortgage Interest Statement (Form 1098)
This is usually your largest expense after depreciation.
2. Property Tax Records
Montana tax rates fluctuate, so accurate statements are critical.
3. Insurance Premium Statements
Landlord policies, umbrella, and special coverages.
4. Income Statements (Rental Income Summary)
Show every month of rent and any late fees or additional payments received.
5. Expense Statements for the Entire Year
Break these into major categories:
Repairs
Maintenance
Utilities (if owner-paid)
Landscaping
Snow removal
Pest control
Advertising
Accounting or legal services
Organized categories = lower CPA bill and fewer errors.
6. 1099s for Any Contractors You Paid $600+
If you worked with independent contractors, you may be required to issue 1099s.
7. Depreciation Schedules
Your CPA needs these every year — even if nothing has changed.
8. Lease Agreements & Amendments
Useful for verifying dates, rent amounts, and tenant circumstances.
9. Mileage Log
If you drove for property-related tasks.
10. Receipts for Anything You Purchased for the Property
Even small purchases matter:
Tools
Paint
Air filters
Locks
Cleaning supplies
Small expenses multiply into big deductions.
How Montana-Specific Tax Rules Affect Your Rental
Montana has its own nuances that Billings landlords should understand. While you should always consult your accountant for specifics, here are the common Montana considerations:
1. Montana Taxes Rental Income
Just like federal taxes — but with different brackets and rules.
2. Depreciation Rules Mirror Federal, but Timing Matters
Montana follows standard depreciation but may differ on bonus depreciation practices.
3. Property Taxes Are Deductible
And they vary significantly by neighborhood.
4. Montana Encourages Accurate Record-Keeping
If you are audited and your documentation is incomplete, deductions may be denied.
5. Using a professional management company helps you stay compliant
CPAs love when an owner works with organized managers who document everything clearly.
Why Using Property Management Makes Tax Season Easier
This is where owners truly see the value of partnering with Billings Property Management professionals.
A good management company does not just “collect rent.”
A good management company:
Tracks income
Tracks expenses
Categorizes repairs vs maintenance
Stores invoices
Maintains year-round documentation
Issues annual financial summaries
Provides clean expense reports
Keeps digital receipts
This saves your CPA hours of work — and saves you hundreds of dollars in accounting fees.
It also makes your tax deductions bulletproof, because clean records = stronger protection.
Owners who self-manage often show up with:
Missing receipts
Mixed personal and rental expenses
No depreciation schedule
Untracked mileage
Conflicting numbers
CPAs can only deduct what is documented — so poor documentation literally costs owners money.
What Premier Provides Owners for Tax Prep
At Premier, we keep tax season simple by providing:
✔ Annual Cash Flow Summary
A clear breakdown of:
All rental income
All categorized expenses
Management costs
Owner contributions
Owner draws
Your accountant uses this as the backbone of your return.
✔ Maintenance & Repair Documentation
Invoices and descriptions for every work order completed throughout the year.
✔ Year-End Statements Through AppFolio
Clean, organized, easy-to-download reports that CPAs love.
✔ Digital Receipt Storage
No more digging through emails or texts.
✔ Support for Accountant Questions
We don’t give tax advice — but we provide all documentation they need to support your filing.
Our goal is simple:
Make tax season stress-free and help owners maximize every legal deduction.
How to Maximize Deductions Legally (Not Aggressively)
Good investors deduct everything they can, but never what they shouldn’t.
Here’s what the IRS expects:
1. Track Expenses Accurately
No rounding numbers. No guessing.
2. Separate Rental & Personal Banking
Mixing finances is the #1 landlord audit trigger.
3. Document Every Expense With a Receipt
Screenshots, PDFs, invoices — all acceptable.
4. Distinguish Between Repairs & Improvements
Repairs = deductible this year
Improvements = depreciated over time
5. Maintain a Log of Any Travel or Mileage
It should include:
Date
Purpose
Miles driven
6. Use a CPA Who Understands Real Estate
Regular tax preparers miss deductions constantly.
A real estate CPA pays for themselves in tax savings.
7. Keep Records for 7 Years
The IRS can audit prior years — stay protected.
When owners follow these principles, their tax bills shrink dramatically.
Why Owners Care: Tax Write-Offs = Real Money Saved
For most Billings landlords, taxes are the single largest annual expense after mortgage and maintenance.
Optimized deductions can:
Reduce taxable income
Increase cash flow
Offset capital gains
Improve long-term portfolio value
Reduce stress and financial surprises
Every dollar you deduct is a dollar you keep — money that goes directly into:
Repairs
Upgrades
Reserves
Additional investments
Family income
Wealth-building
The IRS gives landlords generous deductions because rentals are considered a business.
But only if you treat it like one.
That’s why partnering with a professional property management Billings MT provider is not just convenient — it’s financially strategic.
Start Your Tax Prep Early — Your Future Self Will Thank You
January is the perfect time to:
Organize your documents
Collect missing statements
Categorize your expenses
Review your rental performance
Ask your CPA early questions
Prepare financially for 2026
This is how smart investors stay profitable.
Whether you own a single-family rental, a small plex, or a growing portfolio, the goal is the same:
Minimize taxes.
Maximize cash flow.
Protect your investment.
And we’re here to help.
Want Stress-Free Tax Prep Next Year? Let Premier Handle the Paperwork.
When you partner with Premier Property Management, you’re not just getting leasing, maintenance, and tenant care — you’re getting organized, accurate documentation that makes tax season simple and profitable.
If you want:
Clean year-end financials
Organized expense reports
Easy-to-download statements
Full documentation for your CPA
A system that protects your deductions
Then now is the perfect time to reach out.
Contact Premier Property Management to learn how we can simplify tax season and improve your rental performance.
The most profitable year for your Billings rental property begins with great documentation — and a partner who knows how to protect your investment.