Do you have to pay taxes on rental income?

Answer by  Richard88 (391)

In the U.S., rental income is reportable on Federal form 1040 schedule E. If your total income after deductions and rental property expenses is positive, then you would pay taxes on the rental income. If your rental property expenses are high, then you might have cash coming in from rent, but no net profit, and no tax would accrue.

Answer by  Latin4 (11170)

The keyword is income. Any income what ever it may be is taxable. Your best advice would be to get a tax professional and discuss the best way to handle this. You don't want any suprises from the IRS when you don't claim this on your return. I'm sure this one is always overlooked.

Answer by  rjn613 (100)

Of course -- if it's income, you have to pay taxes on it. However, you can reduce the taxable income by the amount that it costs to earn it. For example, if you get income from renting a house, you can deduct mortgage payments, property taxes, etc. from the rental income you must pay taxes on.

Answer by  John (9008)

Rental income is taxable, just like most other forms of income. You can deduct any expenses, however, and you are only taxed on your profits. Thus, if you have to pay a mortgage or have repair expenses, for example, you can deduct these costs and only pay taxes on your profits.