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Accounting

About The Schedule E 1040 Form

What Is the IRS Form Schedule E?

Schedule E is part of Form 1040. It is used to report the income and loss of supplemental income sources. This is income that is not earned through a business activity like employment. 

Supplemental income is considered passive income, such as collecting rent. Of course, as a landlord, you know that rental income is anything but passive. However, passive is how the IRS sees it. Examples of supplemental income sources that require you to file a Schedule E with your income are; rentals, royalties, S corps, partnerships, and a few other sources.

If you own a rental then, you need to file a supplemental income and loss form schedule e. 

Get the most recent version from: https://www.irs.gov/forms-pubs/about-schedule-e-form-1040

filing taxes schedule e form 1040

How Much Can You Deduct as A Landlord?

If you are deemed to be an active participant in the management of your properties you may be able to deduct up to $25,000 worth of expenses from your taxable income each year. Losses that go over this amount and losses beyond your income for that year can roll over to the following year.

For example, if your property were to bring in $20,000 worth of income, however, you reported $30,000 worth of expenses in this same year. As this is over the income amount you would carry the $10,000 worth of loss to be deducted against your following year’s income. 

In certain scenarios, you may even be able to deduct your rental losses against your personal income tax. This would allow you to deduct a further $5,000 – this time from taxed income through other sources, eg. your employment. However, note you would still only be able to deduct the maximum of $25,000 – the remaining $5,000 of losses would still roll over to the following year. 

For more detailed information read:

Download Our Guide To Tracking Expenses
schedule e form
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Using Landlord Studio to Track Income and Expenses

Looking for an easier tax time? Landlord Studio has developed a Schedule E report that users can generate instantly, print out and quickly use it to fill out their Schedule E form.

Here are 5 Ways Landlord Studio can save you time money and hassles when it comes to filing your taxes.

1. We’re Mobile

Landlord Studio is available on all devices, what this means is you can stay on top of your properties wherever you have your phone. Simply open the app and enter things like income and expenses as you go.

On top of this, you can easily digitize receipts by taking a quick photo of them with your phone and storing them in your account.

2. Easily Itemize Expenses with Our Expense Categories

We have already created relevant expenses for you with the IRS categories in mind – but you can easily customize your expense categories. 

Simply select the relevant category from the drop-down and hit save.

3. Manage Expenses on An Organization, Property Or, Individual Unit Level.

It’s important you have the correct segmentation of your income expenses when completing the Schedule E form and filing your taxes. We allow you to organize expenses on an organization, property and even per unit level.

4. Advanced Reporting

You can run instant customizable reports through our software to gain a clear financial oversight as well as to help you easily and efficiently fill out your 1040 schedule e form.

5. Create a Schedule E Report

We recently released an updated report template for our US users to make filling out IRS for 1040 Schedule E. This report breaks down and organizes your income and expenses on a property basis to help speed up the filing of your taxes.

 

Schedule e files

Final Words

You need to consider the passive activity rules to determine the limitations exist on the amount you are allowed to deduct. These rules state that depends on how active you are in the management of your rental property. 

If you aren’t active in the management of your rentals the IRS treats this income as entirely passive which means you can only deduct losses from that passive income and not against other income streams.

Related Articles:

Landlord AppProperty ManagementProperty Management AppReal EstateReal Estate InvestingTax Deductible ExpensesTaxes

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Ben Luxon

"Ben is an author and real estate enthusiast. His interest in all things entrepreneurial has led him to work with real estate professionals all over the world, distilling their knowledge into articles and Ebooks. His love of travelling has taken him to over 10 countries in the last year, where he has sampled the craft beer of them all."

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