Tax time can be a stressful time of the year even for landlords. The good news is that there are tax deductions that can help landlords maximize their return. For example, certain mortgage interest payments, real estate taxes, or depreciation costs may be deductible. Schedule E for landlords at tax time is an important form to file with Form 1040 as it reflects income and expenses for rental property.
Schedule E is divided into two parts. The first part is for reporting income, such as rent payments and other income-related sources from the rental property. The second part is for reporting expenses related to managing the rental property. The range of expenses can be from maintenance and repair costs to insurance premiums and property taxes.
With Schedule E, it is important to properly document all sources of income and expenses. This includes gathering receipts, invoices, and other documentation to prove income and expenses. It is also important to keep accurate records of your rental income and expenses throughout the year. Using landlord accounting software to track income and expenses makes filing Schedule E easier. For example, free landlord accounting software like RentalIncomeExpense.com provides a schedule E helper report to make the preparation of schedule E for landlords at tax time much easier.