Year end is twelve month-end closes plus five reconciliations: income to the bank, deposits held to the deposit ledger, expenses to receipts by category, improvements to the basis file, and vendor totals to the 1099 threshold. The rules are the ones every other guide in this section cites — IRS Publication 527 for income and deductions, the tangible property regulations for the repair/improvement split and the de minimis election, the 1099 thresholds ($2,000 for payments made in 2026), the mileage rates (72.5¢ then 76¢ in 2026) — and Texas Property Code §92.106’s duty to keep accurate deposit records.
The checklist
| Step | Do | Output |
|---|---|---|
| 1. Income | Sum ledger receipts per property; reconcile to bank deposits; add advance rent, fees and deposits kept; remove deposit refunds that passed through the account | Schedule E income per property |
| 2. Deposits | Reconcile the deposit ledger to the balance held; list amounts retained this year and their accounting dates | §92.106; income line |
| 3. Expenses | Categorise every payment with its receipt; split repairs from improvements; apply the de minimis election where used | Schedule E expenses |
| 4. Improvements | Move each improvement to the basis file with date and cost; compute the new depreciation schedule | Depreciation |
| 5. Mileage | Total the log at the two 2026 rates; add tolls and parking | Vehicle expense |
| 6. Vendors | Total non-card payments per unincorporated vendor; prepare 1099-NECs at $2,000 or more; confirm W-9s | January filings |
| 7. Property tax | File the county tax bills (paid in the year) and note the 2026 rates for next year’s budget | Taxes line; budget |
| 8. Insurance | Premiums paid; claims and proceeds | Insurance line; basis adjustments |
| 9. Compliance | Licence renewals, registrations, inspection certificates due in the new year | City programs |
| 10. Package | One folder per property: summary, ledgers, receipts index, basis update, 1099 list — to the preparer | Return |
Timing
Start in the first week of January: 1099s and the vendor totals first, because they have the earliest deadline; then income and deposits, which are mechanical if the closes were done; then expenses. Keep the package with the return for the IRS retention period (IRS).
Frequently asked questions
What does a Texas landlord need for year-end taxes?
Reconciled income per property, the deposit ledger with amounts kept, categorised expenses with receipts split between repairs and improvements, the basis file updated, the mileage log totalled and vendor totals for 1099s (IRS Publication 527).
Which deadline comes first?
Form 1099-NEC filings for the prior year, in January; prepare the vendor totals first.
Sources
Rules change and the right answer can depend on the home, the city, the lease and the timing. These are the official pages this guide relies on; check them before signing, charging a fee, sending a notice or making a legal decision.
- IRS Publication 527 (2025) — Residential Rental Property ↗
- IRS — Tangible property final regulations (de minimis, small taxpayer and routine maintenance safe harbors) ↗
- IRS — Am I required to file a Form 1099 or other information return? ↗
- IRS — Standard mileage rates ↗
- IRS — How long should I keep records? ↗
- Texas Property Code, Chapter 92 — Residential Tenancies ↗
- IRS — Tips on rental real estate income, deductions and recordkeeping ↗
General information for U.S. landlords, with a Texas focus. This guide is not legal, tax or accounting advice. Consult a qualified professional for your situation. Written by the rentalfreelease.com Editorial Team; last reviewed September 19, 2026.