Reporting Rental Income: Forms, Deductions & Deadlines

Answer

When you rent out property in the U.S., you must report that income to the IRS—and possibly to your state tax authority—each year. Accurate reporting helps you avoid penalties, capture eligible deductions and stay in good standing with tax authorities.

Here’s how to handle your rental income on your federal return:

• Choose the correct form. Most landlords report rental activity on Schedule E (Form 1040). If you provide substantial services (daily cleaning, meals, concierge), you may need Schedule C instead.
• Gather gross rental receipts. Include all rents, advance payments, security deposit amounts you retain and any fees (pet fees, late charges). Airbnb and similar platforms now issue Form 1099‑K for gross payments over $600 starting in tax year 2024—check your mailbox or online account.
• Calculate deductible expenses. Common deductions include:
  • Mortgage interest
  • Property taxes
  • Repairs and maintenance
  • Insurance premiums
  • Depreciation (27.5‑year residential real estate)
• Complete Schedule E. Enter gross rents on Line 3, total expenses on Lines 5–19, and depreciation on Line 18. The net result (profit or loss) flows to Form 1040, Schedule 1.
• Mind state and local requirements. Many states also tax rental income. File any required state schedule by your state’s deadline (often April 15, but dates vary).
• Keep thorough records. Retain lease agreements, receipts, bank statements, and depreciation schedules for at least three years after filing.

If you’re new to rental reporting or facing complex scenarios—like mixed personal and rental use, short‑term rentals, or multiple properties—it’s advisable to consult a licensed tax professional. Before filing, buyers are recommended to verify all forms and deadlines with the IRS (IRS Renting Real Estate Guide) and your state’s revenue department.