Q4 is when the difference between organized landlords and scrambled ones becomes visible. The landlord who tracked expenses throughout the year hands their CPA a clean ledger and a folder of receipts. The one who didn't spends January reconstructing transactions from memory and bank statements — and misses deductions that can't be proved.
This checklist covers the six areas every self-managing landlord should close out before December 31. Work through each section in order — income first, then expenses, then obligations, then tax mechanics.
1. Income reconciliation
Every platform payout (Airbnb, VRBO, direct, ACH rent) should have a corresponding transaction in your ledger. Missing a deposit means missing gross income — which the IRS can reconstruct from your 1099 forms.
Airbnb reports your gross booking amount on Form 1099-K — not the payout. If your ledger only records the payout amount, your Schedule E gross income will be understated. Record gross income and deduct platform fees as expenses.
Airbnb, VRBO, and payment processors issue 1099-K if you exceeded 200 transactions or $5,000 (federal threshold as of 2024). Your bank issues 1099-INT for savings interest. Collect these and verify they match your records.
2. Expense audit
Pull every debit transaction and verify it's assigned to the correct Schedule E category: advertising, auto and travel, cleaning and maintenance, commissions, insurance, legal and professional, management fees, mortgage interest, other interest, repairs, supplies, taxes, utilities, depreciation, other.
Common errors: repairs logged as improvements (improvements must be depreciated, not deducted immediately), supplies lumped into 'other', mileage not recorded at all. Each mistake either over-states or under-states your deduction.
A repair restores something to its original condition — deductible in full in the year paid. A capital improvement adds value or extends the useful life — must be depreciated over 27.5 years. A new roof is an improvement. Fixing a leaking section is a repair.
3. Mileage log
The IRS requires a contemporaneous log: date, destination, business purpose, and miles. Every trip to the property for inspection, restocking supplies, overseeing a repair, or meeting a tenant counts. The 2024 standard mileage rate is $0.67/mile.
Reconstruct 2024 mileage from calendar entries, bank statements, and receipts if you don't have a log — but start a proper log for 2025. A Google Sheets tab with date, destination, purpose, and miles is sufficient if you fill it in contemporaneously.
4. Obligation review
Property insurance, umbrella liability, STR-specific riders, flood insurance if applicable. Confirm coverage is still active and adequate. A lapsed policy between renewal and payment will deny a claim. Check that your premium paid matches the deduction you're taking.
Only mortgage interest is deductible on Schedule E — not principal repayment. Your lender sends a Form 1098 showing the interest paid for the year. Make sure your expense record matches the 1098 figure.
Confirm property taxes were paid on time and match your ledger records. Unpaid property taxes accrue interest and penalties. Some counties have semi-annual billing — confirm both installments were recorded.
Insurance policies that renew in January or February need attention now. A January 1 renewal date with a 30-day grace period means action is needed in December. Flag anything renewing in Q1 so it doesn't slip past the fiscal year transition.
5. Depreciation
Residential rental properties depreciate over 27.5 years using the straight-line method (land is excluded). If you made capital improvements in 2024 (new HVAC, roof replacement, appliances), each starts its own depreciation schedule. Make sure your CPA has a list of all improvements made during the year.
Any improvement costing $2,500 or more (or $500+ under de minimis safe harbor in some cases) creates a new depreciation entry. Share a list with your CPA before year-end so they can determine whether it's an expense or an improvement.
6. Estimated tax payment
If you expect to owe $1,000 or more in federal tax from rental income, the IRS expects quarterly estimated payments. Q4 2024 is due January 15, 2025. Missing this results in an underpayment penalty — typically a modest amount, but avoidable.
Gross income − operating expenses − mortgage interest − depreciation = taxable rental income (or loss). If you have a net loss and qualify under the passive activity rules (income below $100K, active participation), up to $25,000 of rental losses can offset ordinary income.
How Estavo reduces year-end scramble
- →Every transaction is categorized to a Schedule E category at the time of entry — no year-end re-categorization project
- →ObligationPolicy records track insurance, mortgage, and utility term dates — renewal reminders surface in the Today view automatically
- →Schedule E export generates a clean report organized by category and property, ready to hand to your CPA
- →Mileage can be logged as an Auto & Travel transaction with description — no separate log required for records