rate will my rental income be taxed?
2007-08-07 09:12:25 · 3 answers · asked by unique 1 in Business & Finance ➔ Taxes ➔ United States
you do pay taxes on rental income, except you don't pay social security or medicare tax. Just federal and state. Your rental income will be taxed at the same rate that the rest of your income is taxed (except for long-term capital gains). You will report rental income on Schedule E, along with all expenses related to the rental income. I've attached a blank schedule E & instructions to schedule E. This should help you with allowable expenses for it.
2007-08-07 09:24:52 · answer #1 · answered by Anonymous · 0⤊ 1⤋
You have to pay taxes on the net income, but it's not quite the same as your paycheck. You can deduct the costs of maintaining the rental unit including interest, taxes, insurance, maintenance, repairs, cleaning, utilities, depreciation, etc. If you have a net income it's taxable as ordinary income, however you do NOT pay Social Security or Medicare taxes on it.
2007-08-07 16:19:18 · answer #2 · answered by Bostonian In MO 7 · 2⤊ 0⤋
You pay taxes on it, but use a Schedule E for your income and expenses, then transfer the net to your 1040. It doesn't go directly onto the 1040. You'll pay tax at whatever your bracket is - that depends on your total income for the year - but you deduct expenses on the property from the rent you receive, and only pay taxes on the net.
2007-08-07 16:39:13 · answer #3 · answered by Judy 7 · 1⤊ 0⤋