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📊 SCHEDULE E COMPLIANT RENTAL TRACKER - USER GUIDE
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Make a Copy of this Sheet for a Working Version for Your Record ---> File > "Make Copy" or "Download" and Select Excel
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⚠️ CRITICAL: MORTGAGE PAYMENTS ARE NOT DEDUCTIBLE!
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This tracker follows IRS Schedule E (Form 1040) line-by-line order.
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ONLY the interest, insurance, and property tax portions of your mortgage payment are deductible.
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Principal payments reduce your loan balance but are NOT tax deductible.
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MORTGAGE PAYMENT BREAKDOWN
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Typical monthly mortgage payment of $2,000 might break down as:
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• Principal: $600 → NOT DEDUCTIBLE
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• Interest: $1,000 → DEDUCTIBLE (Schedule E Line 12)
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• Hazard Insurance: $200 → DEDUCTIBLE (Schedule E Line 9)
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• Property Tax: $200 → DEDUCTIBLE (Schedule E Line 16)
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Total Payment: $2,000
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Deductible Amount: $1,400 (Interest + Insurance + Taxes)
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Non-Deductible: $600 (Principal)
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ESCROWED INSURANCE & TAXES - CRITICAL!
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If your insurance and property taxes are escrowed (paid by your mortgage company):
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✅ You can ONLY deduct amounts actually PAID by the mortgage company to:
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 • Insurance company (for hazard insurance premiums)
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 • Tax collector (for property taxes)
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❌ You CANNOT deduct:
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 • Amounts you deposited into escrow during the year
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 • Escrow balance at year-end
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📋 REQUIRED DOCUMENTATION:
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 1. Form 1098 (from your mortgage company)
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 2. Year-end mortgage statement showing:
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 - Total escrow deposits during the year
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 - Amounts PAID FROM ESCROW for insurance
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 - Amounts PAID FROM ESCROW for property taxes
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 3. Escrow analysis statement (if available)
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EXAMPLE:
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You deposited $2,400 into escrow during 2026 ($200/month)
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Mortgage company paid $2,100 from escrow:
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 • Insurance: $1,200
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 • Property Taxes: $900
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DEDUCTIBLE AMOUNT: $2,100 (what was actually paid)
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NOT DEDUCTIBLE: $300 (remains in escrow balance)
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SCHEDULE E EXPENSE ORDER (Lines 5-19)
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This tracker follows the exact Schedule E line order:
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Line 5: Advertising
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Line 6: Auto and Travel
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Line 7: Cleaning and Maintenance
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Line 8: Commissions
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Line 9: Insurance (enter deductible portion only)
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Line 10: Legal and Other Professional Fees
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Line 11: Management Fees
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Line 12: Mortgage Interest (enter deductible portion only)
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Line 13: Other Interest
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Line 14: Repairs
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Line 15: Supplies
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Line 16: Taxes (enter deductible portion only)
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Line 17: Utilities
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Line 18: Depreciation
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Line 19: Other Expenses
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HOW TO USE THIS TRACKER
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STEP 1: ENTER PROPERTY INFORMATION
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• Go to each Prop 1-6 sheet
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• Enter property address in Row 2
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STEP 2: ENTER MONTHLY INCOME
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• Enter rental income in the INCOME section
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• Total income calculates automatically
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STEP 3: ENTER SCHEDULE E EXPENSES (Lines 5-19)
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• Enter expenses in Schedule E line order
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• Skip Lines 9, 12, 16 (insurance, mortgage interest, taxes)
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• These go in the Mortgage Payment Components section below
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STEP 4: ENTER MORTGAGE PAYMENT COMPONENTS
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• Get Form 1098 from your mortgage company
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• Get year-end mortgage statement
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• Enter each component separately:
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 - Principal (NOT deductible - for info only)
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 - Mortgage Interest (from Form 1098)