Can I deduct mortgage interest on my rental property if I already claimed it as an expense?

Thanks for explaining that! So if I'm taking the standard deduction this year (which is higher than my itemized would be), I basically just claim the 70% rental portion on Schedule E and that's it? The personal 30% portion just doesn't get used anywhere?

That's exactly right. If you're taking the standard deduction because it's higher than your itemized deductions would be, then you'd only deduct the 70% rental portion on Schedule E. The personal 30% portion effectively doesn't provide any additional tax benefit in this case. This is actually quite common - many people with rental properties end up only deducting the rental portion of their mortgage interest on Schedule E because the standard deduction is more beneficial than itemizing. Just make sure when TurboTax asks about your mortgage interest, you're clear about what portion relates to the rental so it gets allocated correctly.

Did it actually work with mixed-use properties specifically? My CPA charged me $350 just to figure out how to allocate expenses on my duplex last year, and I'm thinking of going the DIY route this time.

I'm a bit confused about how an AI tool could determine the personal vs rental split. Don't you need to figure that out yourself based on square footage or some other measurement? Or does it just help with the calculations after you input the percentages?

It absolutely works with mixed-use properties! I had a similar duplex situation with a 60/40 split. The tool guides you through calculating the correct allocation based on square footage or whatever method you're using, then does all the math for you to ensure you're reporting correctly on both schedules. For your question about determining the split, you're right that you need to provide the basis for allocation. I entered my square footage measurements, and the tool helped confirm this was a reasonable approach and then applied it consistently across all relevant expenses - not just mortgage interest but also property taxes, insurance, and even depreciation calculations.

How does this actually work? The IRS phone lines are notoriously jammed, especially during tax season. Are they just using some trick to get through faster or what?

Sounds like BS honestly. I've heard the IRS doesn't even answer half their calls, and when they do, the wait times are hours long. No way some service gets you through in 20 minutes unless they're doing something sketchy.

The service works by using an automated system that navigates the IRS phone tree and waits on hold for you. When an agent finally answers, you get a call back and are connected immediately. It's not a trick - it's just technology handling the tedious waiting part so you don't have to sit there listening to hold music for hours. I was skeptical at first too, but it works completely within the IRS's normal phone system. They don't have any special access or do anything sketchy. They just have a system that can wait on hold so you don't have to. The 20-minute connection time I mentioned was honestly lucky - sometimes it takes longer, but the point is you don't waste your own time waiting.

What about depreciation? I always get confused about whether I'm supposed to depreciate just the building or the whole property value including land? And what rate do you use?

Great question about depreciation! You only depreciate the building portion, not the land (since land doesn't "wear out" over time). You'll need to determine what portion of your purchase price was for the building versus the land - sometimes your property tax assessment can help with this breakdown. For residential rental property, the depreciation period is 27.5 years. So each year, you can deduct 1/27.5 of the building's value (not including land) as a depreciation expense on Schedule E. This is a significant deduction that many new landlords overlook or calculate incorrectly.

Did you end up getting penalized too or just had to pay back the tax amount? I'm worried because I think I might have made the same mistake last year.

This is incredibly helpful advice! I'm dealing with a similar situation on my first rental property and was feeling overwhelmed by all the allocation requirements. Your point about creating a property allocation worksheet is brilliant - I never thought about documenting my methodology separately from the actual tax forms. Quick question: when you say "consistently across all of them," does that mean if I use square footage for mortgage interest allocation, I should use the same square footage method for property taxes and insurance too? Or can I use different reasonable methods for different types of expenses as long as I'm consistent year over year? Also, did you find any particular software or tools helpful for tracking all these allocations, or did you just stick with a basic spreadsheet?

Great question about consistency! Yes, you should absolutely use the same allocation method (like square footage) across all your expenses for the same property. So if you're using a 70/30 split based on square footage for mortgage interest, you should apply that same 70/30 split to property taxes, insurance, utilities, repairs, etc. The IRS expects this consistency because the underlying logic is the same - you're separating business use from personal use. You can use different methods for different properties if you have multiple rentals, but for each individual property, stick with one reasonable method consistently year after year. As for tracking, I actually started with a basic Excel spreadsheet but eventually moved to QuickBooks Self-Employed because it made the monthly expense tracking so much easier. It has a feature where you can set up automatic percentage splits for recurring expenses, which saves tons of time during tax season. But honestly, a well-organized spreadsheet works just fine too - the key is just being consistent about entering everything as it happens rather than trying to recreate months of expenses later!