In the US, landlords are obligated to report rental income received from tenants. The IRS’ Schedule E of Form 1040 captures associated income and expenses for each rental property. Most people do not get excited when it comes to preparing taxes. The IRS and many software providers provide landlord rental income expense tips and tools to make the reporting process easier.
The IRS provides guidance for landlords on how they can correctly report income and realize as many deductions as possible. Most taxpayers try to minimize what they owe to the government. Landlords can deduct expenses such as mortgage interest, property tax, and depreciation, which can be hugely beneficial. It is always good practice to seek the professional advice of an accountant with any questions or concerns.
In addition to deducting expenses, other landlord rental income expense tips include easy and complete record keeping. Landlords can use a spreadsheet to record income and expenses, but there are better tools, especially those designed specifically for the small landlord. For example, RentalIncomeExpense.com is a free tool for landlords. With this software, you can easily record expenses and generate valuable reports at tax time.