How Do Landlords Declare Rental Property Income?

If you are a rental property owner, you have a lot of responsibility for reporting rental property income…

If you are a rental property owner, you have a lot of responsibility for reporting rental property income tax every year. Filling taxes requires landlords to declare any form of payment received as rental property income, which can be a daunting task for those who lack the time or are busy with other important things. At 3 Options Realty, we have a team of experienced professionals who can help you declare rental property income and ensure investors deduct qualifying expenses from the total revenue. A property management company takes the time to ensure taxes are properly filed, and all the requirements are adhered to without violating any laws. Here are some tips to consider if you need to brush up on tax requirements.

Do Landlords Have to Declare Rental Property Income?

The IRS defines rental income as any payment received for the occupation or use of your rental property. Any landlord with multiple properties must report the rental payment on each, prompting professional help to avoid any law infringements. Property management companies can ensure any income you generate is recorded, making it easy when filing taxes. Here are some of the income landlords are expected to report.

Security Deposits

Security deposits are crucial if a prospective tenant wants to move into your rental property. Landlords who wish to withhold a tenant's security deposit must report it as income on their taxes. Keeping up with the various reasons for withholding tenants' security deposits can be challenging, especially if you have many rental properties. Reputable property managers can ensure any withheld security deposits are noted for easy filing of taxes.

Tenant Paid Expenses

A tenant can be forced to pay for various expenses like utilities in your rental property, which should be reported as income. If these costs are deductible, then you can deduct them. Our property management experts can help keep track of such expenses, making it easy for you when filing your taxes.

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Advanced Rental Payments

This includes any payment received before the actual period it's supposed to cover. This is payment made for the future use of a property, which should be declared alongside regular costs. If it is not easy keeping up with all the payments made on your rental property, 3 Options Realty is the right property management company for you. We take the time to ensure every payment is recorded for a less stressful filling.

Lease-to-Buy Payments

This type of contract allows tenants to purchase a rental property after several payments, making it crucial for landlords to report the income on taxes. Although these contracts are rare and often tricky for most people, we can help you handle them without compromising the ownership of the property. These are some payments a landlord needs to include in taxes to ensure they are running a legal business.

Our team of property management experts can help you report rental property income and prepare any forms required. Call us today at 3 Options Realty for top-notch services at a competitive market price.