Although the last thing many people want to think about is taxes, it can pay to start planning ahead, especially for investors who own rental property in their portfolio.

While it’s possible to use a spreadsheet like Microsoft Excel to keep track of rental income and expenses for rental property taxes, most investors eventually upgrade to a more user-friendly system. That’s because spreadsheets require time-consuming manual data entry, and it can be easy to overlook a valuable deduction, even with just one rental property.

With tax season around the corner, now might be the perfect time to begin using rental property tax software to automatically track income, expenses, and property performance and export tax-ready financials when tax time rolls around.

Here are 9 of the best tax software and accounting solutions for rental property, according to Landlord Gurus, Investopedia, and The College Investor. Criteria used to arrive at these rankings include tax preparation, reporting, expense tracking, cost, company history in the market, and reputation for reliability and customer service.

Stessa

Stessa is ranked as the best overall accounting and reporting tool for landlords, according to Landlord Gurus, a company that has over 30 years of experience providing expert advice on the complex issues facing landlords and property managers, such as tax preparation.

Landlord Gurus describes Stessa as the best asset management and accounting software for real estate investors, with features including smart money management, automated income and expense tracking, rent collection, tenant screening, and personalized reporting. In addition to its easy-to-use online platform, Stessa gives investors mobile access with iOS and Android applications. 

Investopedia also rates Stessa as offering the best value. That’s because Stessa offers everything a landlord with several properties would need, including a variety of financial reports and Internal Revenue Service (IRS)-ready tax statements.

To make tax time even more of a breeze, the Stessa Tax Center has helpful how-to articles, tax resources created in partnership with The Real Estate CPA, and a TurboTax discount exclusively for members of the Stessa Community.

Beyond helping you with your accounting, Stessa also offers landlords:

• Automated accounting tools: Replace cumbersome spreadsheets and easily track income and expenses. Stessa automates the process of categorizing transactions, reducing time spent on manual data entry.
• Manual expense tracking: Enjoy precise record-keeping of all property-related expenses, from maintenance costs to insurance fees, for a comprehensive view of property expenditures.
• One-click smart receipt scanning: Quickly and accurately add expense receipts to your property records, reducing the risk of losing or misplacing vital receipts.
• Mileage tracking: Track all travel related to your property management efforts for accurate expense reporting. This feature is particularly beneficial for tax purposes, as you can sometimes deduct these costs from taxable income.
• Automated bank feeds: Connect unlimited bank accounts for real-time income and expense tracking so you can manage your cash flow effectively and stay on top of your financial situation.
• Centralized dashboard with key metrics and complete chart history: Access a clear real-time overview of your property performance. The dashboard displays critical metrics and historical data in an intuitive, easy-to-understand format.
• Rental applications: Manage tenant applications efficiently and effectively by streamlining the process of publishing vacancies, and collecting and reviewing applications.
• Tenant screening: Use a proprietary approach with RentPrep for comprehensive tenant checks, including a full credit report, background check, and more. For additional screening, landlords can add income verification or judgment and liens, increasing the odds of selecting reliable tenants.
• Online rent collection: Automate your rent collection process, including payment reminders and late fees, reducing the likelihood of missed or late payments.
• Landlord banking: Open FDIC-insured bank accounts and enjoy a more efficient way to manage your property-related finances. You can also earn more than 10x the national average interest rate on every dollar of deposits.*
• Mobile app (iOS and Android): Utilize Stessa’s mobile app to help you manage your properties on the go. You can categorize transactions, check key metrics, scan receipts, and view your portfolio from almost anywhere, anytime.
• eSigning (in partnership with DocuSign): Simplify lease signing and other document execution with integrated eSignature capabilities. This feature makes it easier for landlords and tenants to sign important documents, reducing the need for in-person meetings.

Stessa has a robust free option to use, in addition to several paid plans for investors who need more advanced features.

You can always start with the Essentials plan and upgrade to a paid plan as your portfolio expands and your needs evolve.

Get started with Stessa today for free.

TurboTax

TurboTax is rated as the best overall tax software by The College Investor, an investing and personal finance website for millennials. The “best overall” rating means that the software is good or great at almost everything. 

Tax filing with TurboTax is “hands-down the easiest tax software to use,” according to the website’s review. TurboTax users can connect accounts or import files from Stessa to complete tax filing. Best of all, Stessa has partnered with TurboTax to extend an exclusive offer for members of the Stessa Community.

The College Investor also ranks TurboTax Premium as the runner up best tax software for stock market investors, and TurboTax Self-Employed as the runner-up for best tax software for self-employed people.

TurboTax costs $69 for investment and rental property filing, before applying a Stessa discount.

RentRedi

Landlord Gurus ranks RentRedi as the runner-up to Stessa. The easy-to-use mobile app for iOS and Android is an all-in-one solution for landlords, including vacant property marketing, tenant screening, tenant lease agreement signing and storage, online rent collection, and tax-ready IRS Schedule E report generation.

RentRedi subscription plans cost $29.95 for monthly billing, $20 a month for billing every 6 months, and $12 a month for billing once a year. 

TaxSlayer Classic

TaxSlayer Classic is ranked as the best tax software for landlords, according to The College Investor’s review. TaxSlayer Classic supports all major tax forms, credits, and deductions, including Schedule E for rental real estate and S corporations. The rental property tax software can also make calculating real estate depreciation easier.

TaxSlayer Classic covers all income types, with no upgrades or restrictions, and forms can be prepared and e-filed with the IRS and states completely online. Pricing is $32.95 for federal filing, plus $39.95 for each state tax return.

Cash App Taxes

Cash App Taxes (formerly Credit Karma) is free for both state and federal returns and is ranked by The College Investor as the best value for experienced filers and the best software for maximizing credits and deductions. 

While being free is a definite advantage, there are a couple of potential drawbacks to be aware of. To begin using Cash App, the application must be downloaded to an iPhone, then the software can be accessed from either an iPhone or a computer. Unfortunately, Cash App is only available on the App Store for iPhone. 

Also, investors who own real estate in a limited liability company (LLC) or S corporation are unable to file a Schedule K-1 form with Cash App, so they will need to consider other options, such as the Stessa-TurboTax combo.

TaxSlayer Self-Employed

TaxSlayer Self-Employed is specifically designed for small-business owners who file both a 1099 and W-2, as some larger real estate investors do. According to The College Investor, TaxSlayer Self-Employed is premium tax-filing software at a much lower price than companies like H&R Block charge. 

The software goes beyond basic tax filing of income and expenses and may be a good match for investors who are concerned with asset depreciation, business structures, and individual retirement plans. TaxSlayer Self-Employed also supports IRS Schedule C, which is used to report profit or loss from a sole proprietorship business. 

Pricing for TaxSlayer Self-Employed is $6.295 for a federal return, with each state tax return costing an additional $39.95.

Rentec Direct

Landlord Gurus ranks Rentec Direct as the best tax preparation option for both DIY landlords and property management companies. Features include leasing and management, tenant screening, operations management, property and tenant accounting, and Schedule E tax reports.

Rentec Direct pricing for 1-10 units runs between $45 a month and $55 a month, after a 2-week trial period.

AppFolio

AppFolio is the best overall accounting software for rental properties this year, according to research conducted by Investopedia. The software has modules for everything a property manager might need, including marketing and leasing, communication and service, and accounting and reporting. 

Investopedia notes that AppFolio may be a better match for landlords of midsize to large properties with at least 200 units, due to onboarding and minimum monthly fees, and a required portfolio size of at least 50 units. The initial onboarding fee is a minimum of $400, along with a monthly minimum fee of $298 to $7,500, depending on the plan selected.

Buildium

Buildium is ranked as the best accounting software for large property portfolios by Investopedia. Features include payment collections, maintenance and vendor management, accounting and financial reporting, and e-filing a Form 1099. 

Subscription plans from Buildium range from $55 a month for the Essential Plan with up to 150 units, the Growth Plan starting at $174 a month, and the Premium Plan with a starting price of $375 a month.

Tax tips for rental property owners

TurboTax is rated as the best overall tax software and also provides an exclusive offer to members of the Stessa Community. But the software provider doesn’t stop there.

TurboTax has put together a list of often-overlooked tax tips for landlords, including:

Repairs vs. improvements

A repair expense can be deducted the year the cost is incurred, but improvements must generally be added to the property basis and depreciated over time. Repairs are things that restore the property to its original condition, such as painting or fixing a broken window. Improvements, on the other hand, increase the value of a home, such as adding additional square footage to increase the monthly rent.

Legal and professional fees

The cost of hiring a real estate attorney or certified public accountant (CPA) who provides services directly related to a rental property are generally fully tax deductible. Examples of legal and professional fees rental property owners incur include paying an attorney to write a lease or hiring a CPA to assist with tax preparation.

Depreciation recapture

Real estate investors benefit from claiming depreciation expenses each year to reduce taxable net income. However, when a rental property is sold, the IRS requires investors to “recapture” depreciation and pay tax. 

Before selling an investment property, it’s important to consider the tax consequences of depreciation recapture. Investors may wish to analyze the pros and cons of conducting a 1031 tax-deferred exchange to purchase a replacement investment property and defer any capital gains and depreciation recapture tax liability.