What Tax Documents Do I Need To File My Taxes as a Landlord?

When becoming a landlord or property manager, you are responsible for reporting your rental income each tax season. You can be subject to costly fees, fines, or penalties if you don’t report the proper landlord taxes. This is especially true with the current 1099 requirement from the IRS. 1099 requires landlords to report rental income over $600 collected through payment processing platforms.

Depending on your situation, the IRS (Internal Revenue Service) requires you to report through the proper tax forms. Each form outlines different information. The main thing you need to know is if you’re filing as an individual or business entity. If you are unsure how to file, working with a certified tax accountant is recommended. Examples of these forms include Form 1099, Form 1040 or 1040-SR, and Form 8825.

3 Common Documents to File Landlord Taxes

You must fill out several tax forms for your real estate business. Below are the three most common forms. (Note that we are not accountants, so make sure you check with an accountant!)

1. Form 1099-K

The IRS defines Form 1099-K as “an IRS information return used to report certain payment transactions to improve voluntary tax compliance.” Unlike in previous years, it is now required to have a minimum number of transactions and $600 or more payments. Receive more than the minimum tax return filing requirements from a payment processing platform in the prior calendar year. You should receive a Form 1099-K by January 31st of the following year you are filing for.

2. Form 1040 or 1040-SR (Schedule E)

Form 1040 is an official document taxpayers can use to file annual income tax returns. Form 1040-SR is the same but intended for taxpayers 65 or older.

This section refers to those reporting rental property whose title is in their own name. This includes sole proprietors, Co-ownership, and LLCs owned by a single person.

The forms report rental income, expenses, and applicable MACRS depreciation related to the real estate you rent out. Divided into sections to report your income and deductions, the form helps determine the taxes you owe or expect to receive in a tax refund.

Note: You may also need to attach additional forms depending on the type of income you need to report related to your rental business.

3. Form 8825

To report income and expenses for your rental properties under an incorporated partnership or S corp, you will use Form 8825. You can also report net income or losses from your rental property activities from partnerships, estates, or trusts on this form.

As the tax season opens and closes, you may find it helpful to know which forms you will most likely need to file. Remember, you don’t have to fill your landlord taxes out alone. Using a CPA can benefit your process and assure you everything is in order.

Receive Landlord Tax Deductions

First, you want to grab every basic tax deduction you can get. Possible deductions include insurance, property tax, advertising expenses, interest, and maintenance costs.

Another tax reduction you can acquire is if a business entity owns the property. You can get a quality business income deduction or a QBI deduction. You can deduct about 20% of your passthrough business income with a $163,000 individual cap and $326,600 for married taxpayers.

The final way to reduce your taxes is to calculate and deduct depreciation. Depreciation is unique among the types of reductions you can use. You can remove part of your value each year from larger business-related purchases.

Doorloop gives a great example: if you buy new laptops for the team, you can deduct a good portion each year for every year of its “useful life” or until it is not useable anymore. If you estimate that these laptops have a useful life of five years, you can deduct 20% of their value each year for five years. That equals $2,000 of tax deductions each year for five straight years.

We aren’t accountants so you should be sure to check with one to make sure you’re covering all your bases – but hopefully this can give you a place to start! Also feel free to get in touch if you need a good accountant or want some advice,

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