Once your PRO trial is over you can continue using Landlord Studio GO completely free.
By continuing you agree to our Terms & Conditions.
Please visit our United Kingdom site for a better experience
ContinueLearn how rental income is taxed, key deadlines, and deductions, and how Landlord Studio simplifies tax compliance for landlords.
Head of Real Estate Education and Editorial at Landlord Studio
Landlord Guide Chapters
Landlords often enjoy a relatively passive income stream from their properties. However, like any other form of income, rental income is subject to taxation. This raises an important question: how is rental income taxed?
Failure to file your taxes properly can lead to legal issues which is why understanding how tax on rental income works is crucial for property owners. That's why we created this guide.
This article will cover everything you need to know about taxes on rental property so you can make informed decisions that maximize your financial benefits.
Based on the Internal Revenue Service (IRS) tax bracket, rental incomes are subject to taxation as ordinary income. This means that the tax on rental income is calculated in the same way as your other sources of income.
To give you a clearer picture, here are the tax brackets for 2024 and 2025 for single filers, married couples filing jointly, and heads of households.
| 2024 Tax Rate | Single Filers | Married Filing Jointly | Heads of Households |
|---|---|---|---|
| 10% | $0 to $11,600 | $0 to $23,200 | $0 to $16,550 |
| 12% | $11,600 to $47,150 | $23,200 to $94,300 | $16,550 to $63,100 |
| 22% | $47,150 to $100,525 | $94,300 to $201,050 | $63,100 to $100,500 |
| 24% | $100,525 to $191,950 | $201,050 to $383,900 | $100,500 to $191,950 |
| 32% | $191,950 to $243,725 | $383,900 to $487,450 | $191,950 to $243,700 |
| 35% | $243,725 to $609,350 | $487,450 to $731,200 | $243,700 to $609,350 |
| 37% | More than $609,350 | More than $731,200 | More than $609,350 |
| 2025 Tax Rate | Single Filers | Married Filing Jointly | Heads of Households |
|---|---|---|---|
| 10% | $0 to $11,925 | $0 to $23,850 | $0 to $17,000 |
| 12% | $11,925 to $48,475 | $23,850 to $96,950 | $17,000 to $64,850 |
| 22% | $48,475 to $103,350 | $96,950 to $206,700 | $64,850 to $103,350 |
| 24% | $103,350 to $197,300 | $206,700 to $394,600 | $103,350 to $197,300 |
| 32% | $197,300 to $250,525 | $394,600 to $501,050 | $197,300 to $250,500 |
| 35% | $250,525 to $626,350 | $501,050 to $751,600 | $250,500 to $626,350 |
| 37% | More than $626,350 | More than $751,600 | More than $626,350 |
In addition to the tax rates mentioned above, you may also be liable for taxes on rental property imposed by your state government. When calculating your rental income and navigating the complexities of rental income tax, it’s wise to consult with a financial advisor or tax expert.
As a landlord, staying on top of tax deadlines is crucial for managing your rental income effectively. Most tax deadlines for 2024 have already passed, but there are still important dates to keep in mind. The final deadline for paying estimated quarterly taxes for the fourth quarter of 2024 is January 15, 2025.
For those filing year-end personal tax returns, the deadline is April 15, 2025. If you’re a small business owner or a rental property owner, it’s essential to be aware of the upcoming quarterly estimated tax payment deadlines for 2025.
These payments are due on the following dates:
Depending on your business structure and whether you employ independent contractors or have employees assisting with property management, there may be additional tax considerations to keep in mind regarding taxes on rental property.
| Deadline | Due Date |
|---|---|
| Tax Season Begins | January 23rd |
| Due Date for W-2 Forms | January 31st |
| 1099 Forms Sent | January 31st |
| Tax Day & Form 4868 (Extension Request) Deadline | April 15th |
| Tax Extension Deadline | October 15th |
| Partnerships, Multi-member LLCs, and S-Corporations (Form 1065) | March 15th |
| Extension Deadline For Form 1065 | September 16th |
Effective record-keeping and document storage are crucial for landlords, particularly when it comes to tax reporting. Maintaining accurate records not only ensures compliance with tax laws but also helps maximize deductions and minimize liabilities.
By organizing essential documents throughout the year, landlords can streamline the tax filing process and avoid potential issues with the IRS.
With so many records to maintain—ranging from lease agreements and expense receipts to tax documents—it's easy for things to get misplaced. Disorganized record-keeping increases the risk of errors during tax filing, missed deductions, and even disputes with tenants or the IRS.
When financial records and documents are scattered, tax season becomes stressful and time-consuming. Landlords might miss out on deductions for expenses like mortgage interest, repairs, or capital improvements simply because the receipts weren’t stored properly. Additionally, unclear records can lead to overpayment of taxes or costly penalties for non-compliance. Poor documentation also makes it harder to address tenant disputes or verify income and expenses in case of an audit.
Landlord Studio offers a comprehensive solution to simplify record-keeping and document storage for landlords.
By centralizing your financial and property management data, Landlord Studio helps you:
With Landlord Studio, you can streamline your tax filing process, reduce stress, and focus on managing and growing your rental property portfolio.
Log back in or create your free Landlord Studio account today and generate a free Schedule E report. Make tax time easy with software designed for you.
Filing your taxes as a landlord can feel complex, but with Landlord Studio, keeping accurate and up-to-date rental accounts is easier than ever - allowing landlords to maximize deductions and file a timely tax return. Landlord Studio helps you organize the data you’ll need for essential forms like the IRS Form 1040 or 1040-SR, and Schedule E, Part I, ensuring you're prepared to report your rental activities correctly.
For More Information Read the Guide: Filing Taxes on Rental Properties: Schedule E Guide
On Schedule E, you need to list your total rental income, expenses, and depreciation for each of your individual properties. This means you need to be tracking your income and expenses on a property by property basis - something that can get quite complex if you're using spreadsheets and paper processes or general accounting software like QuickBooks.
Make sure to refer to the Instructions for Form 4562 to calculate the correct amount of depreciation to enter on line 18 of Schedule E. If you have more than three rental properties, you will need to complete and attach additional Schedule E as necessary.
For each property, fill in lines 1 and 2 with the relevant information, including the street address and then list each properties income and expenses by category. However, only complete the “Totals” column on one Schedule E. This column should reflect the combined totals from all your rental properties.
The easiest way to accurately fill out your Schedule E is to leverage software like Landlord Studio. With Landlord Studio you can easily keep accurate up to date records of your finances throughout the year. At tax time, simply generate your Schedule E report (purpose-built for landlords) and copy your details across.
To get your data out of Landlord Studio, simply run a Schedule E report that breaks down the income and expenses for each of your properties as required by the IRS and with default expense categories in-line with the IRS Schedule E Form 1040.
Here's how:
Step 1: Log in or create your free account.
Step 2: Once you're happy income and expenses are up to date, navigate to the reports tab via the left-hand menu.
Step 3: Select the report you want to generate, in this case, the Schedule E report, and hit run.
Step 4: Use the filters at the top to select the properties you want to run the report on. You can also filter by income and expense categories and date range.
Step 5: Export the report as a CSV or PDF file. Easily share this report with your CPA or business partners.
Log back in or create your free Landlord Studio account today and generate a free Schedule E report. Make tax time easy with software designed for you.
It’s important to note that if your rental expenses exceed your rental income, your loss may be subject to limitations. The amount of loss you can deduct may be restricted by passive activity loss rules and at-risk rules.
To determine if your loss is limited, consult Form 8582, which addresses passive activity loss limitations, and Form 6198, which covers at-risk limitations.
If you personally use a dwelling unit that you rent out—such as a vacation home or a residence where you rent a room—your ability to deduct rental expenses and losses may also be limited. Understanding how these factors affect your rental income tax is crucial for accurate reporting.
Landlord Studio offers all the tools you need to enhance your financial management, maximize tax deductions, and ensure compliance with IRS regulations.
With default income and expense categories in line with IRS requirements getting set up and started accurately tracking your finances is easy - simply, add your property and lease details and begin logging payments.
If you want to streamline your rental accounting further, you can connect your bank accounts, scan receipts, track mileage, and run custom reports to get deep financial insights.
Key tax and accounting features you'll love, include:
Document & Receipt Management: Securely store essential documents including lease agreements, receipts, and other important tax-related paperwork in one place.
Income & Expense Tracking: Collect rent online to automate income tracking and log expenses on the go via the mobile app.
You can set up recurring expenses for regular payments such as mortgage and insurance costs. By connecting your bank accounts, you can import up to two years of transactions to review and reconcile income and expenses in real-time.
Bank feeds employ smart logic with custom rules to auto-suggest matches and help you streamline your income and expense reconciliation. You also get your very own AI accounting assistant built-in to help ensure your expenses are reconciled and categorized accurately.
Reduce manual data entry, save time, and minimize the potential for costly accounting errors. Ensure your financial records are kept accurate and up-to-date throughout the year so you never miss an expense again.
Customizable Tax Reporting: With Landlord Studio you can instantly generate and share any of over 20+ tax and accounting reports including a P&L and Schedule E report.
Deadline Reminders: Set automated reminders for important tax deadlines, ensuring you never miss a filing date.
Landlord Studio is the #1 rated real estate accounting software loved by thousands of landlords. Create a free account today to get started!
