While there are a number of tax obligations associated with property ownership in the US, not all homeowners are obligated to declare rental income to the IRS.
Although the majority of property owners are required to report their rental income, some homeowners are exempt from this requirement.
Homeowners can lower their overall tax burden by investigating possible deductions and determining whether they must disclose rental income by knowing the tax regulations.
Who Does Not Need to Report Rental Income to the IRS?
There is a significant exemption, even though the great majority of homeowners who rent out their homes are required to declare their revenues to the IRS.
A homeowner is exempt from reporting rental revenue if they rent out their house for fewer than 15 days annually.
This tax exemption is a fantastic choice for people who occasionally rent their houses for brief visits because it is covered under the “14-Day Rule.”
However, the homeowner is required to record the revenue as taxable earnings if the rental period is longer than 14 days in a calendar year.
In these situations, the IRS mandates that the homeowner’s annual tax return fully disclose rental revenues.
There are tax deductions available to homeowners who rent their homes
There are a number of deductions that can drastically lower taxable income for people who report rental income after the 14-day exemption expires.
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These consist of:
- Mortgage Interest: You are able to deduct a portion of your mortgage interest.
- Property Taxes: It is possible to claim the real estate taxes paid on the rental property.
- Maintenance & Repairs: Any costs associated with maintaining the rental property.
- Insurance Premiums: Rental use-related homeowner’s insurance.
- Depreciation: Property owners may deduct depreciation over time, if applicable.
Homeowners must fill out Form 1040 and provide the necessary supporting documentation in order to claim these deductions.
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Maintaining accurate records and invoices is essential to guaranteeing that the IRS accepts all deductions.
The 2025 IRS Tax Return Filing Deadline
The IRS tax return date should be known to homeowners who are required to declare rental income. The IRS Tax Return for 2025 must be filed by April 15, 2025.
In addition to ensuring compliance, early filing enables homeowners to potentially obtain tax refunds sooner.
