Texas Rental Property Tax Overview
Texas is one of the states with no state income tax, making it an attractive state for rental property investors. Your rental income is only taxed at the federal level, and you report it on IRS Schedule E. This means more of your rental income stays in your pocket compared to states that tax rental income at 5-10%+.
Property taxes in Texas average 1.68%, which is above the national average of approximately 1.1%. Property taxes are fully deductible on IRS Schedule E, Line 16. Popular rental markets in Texas include Austin, Dallas, Houston, San Antonio, Fort Worth.
Deductible Rental Property Expenses in Texas
The following expenses are deductible on IRS Schedule E for your Texas rental properties. RentalReportLab automatically maps each expense to the correct Schedule E line item.
| Expense | Schedule E Line | Notes |
|---|---|---|
| Advertising / Platform Fees | Line 5 | Airbnb/VRBO fees, listing costs |
| Auto & Travel | Line 6 | Mileage to property for management |
| Cleaning & Maintenance | Line 7 | Regular upkeep, cleaning between tenants |
| Insurance | Line 9 | Landlord policy, liability, umbrella |
| Legal & Professional | Line 10 | Attorney, CPA, property manager fees |
| Management Fees | Line 11 | Property management company (8-25%) |
| Mortgage Interest | Line 12 | Interest portion only (not principal) |
| Repairs | Line 14 | Fixes that restore condition (not improve) |
| Supplies | Line 15 | Hardware, cleaning supplies, keys |
| Property Taxes | Line 16 | Texas avg: 1.68% |
| Utilities | Line 17 | If landlord-paid: electric, gas, water, internet |
| Depreciation | Line 18 | 27.5-year straight-line (building only) |
Filing Schedule E for Texas Properties
As a Texas landlord, you report rental income and expenses on IRS Schedule E (Form 1040). Each property is listed separately on Schedule E with its address and rental days. Your net rental income (or loss) flows to your Form 1040. Since Texas has no state income tax, you only need to file the federal return.
RentalReportLab generates a Schedule E-mapped P&L report that organizes your income and expenses exactly as they appear on the form. Print it, hand it to your CPA, and you're done. Or share a read-only link directly with your accountant.
Important Deadlines for Texas Landlords
- •April 15, 2026: Federal tax return deadline (IRS Schedule E)
- •October 15, 2026: Extended federal tax return deadline (if filed for extension)
- •January 31, 2027: Send 1099-NEC to contractors paid $600+ during 2026
This guide is for informational purposes only and does not constitute tax or legal advice. Tax laws change frequently. Consult a qualified CPA or tax professional for guidance specific to your Texas rental properties.