I, Josiah Roche, hereby give my permission to Rocket, LLC and its affiliates, agents, and partners ("Authorized Persons") to use my name, likeness, and any quotes, statements, or media I provide (collectively, "Materials") for marketing, advertising, or promotional purposes. This includes use on websites, social media, digital or print ads, and other marketing platforms. I understand that my quote(s) may be edited for clarity or length but will not be misrepresented. I confirm that my statements reflect my honest opinions and experiences. By sending this electronic email, I grant Rocket, LLC the right to use these Materials and my Likeness without further approval or compensation. I also release Rocket, LLC from any liability related to the use of this content as outlined above. In the US, rental income is taxed as ordinary income, which means I add my profit from the property to my salary and other income and pay tax at my normal marginal rates. For tax, rental income includes regular rent, extra fees (like pet fees, cleaning fees, parking, laundry), and most expenses I pass through to tenants, such as utilities I bill them for. States that have an income tax usually treat rental income the same way the IRS does. My net rental income from the federal return flows into my state return, then the state's own brackets and rules decide how much I pay. A few states don't have an income tax, so they don't tax rental income at all. Short-term rentals like Airbnb are still rental activity in most cases, unless I'm running it like a hotel with daily cleaning and lots of services, which can tip it into business income. The 14-day rule says if I rent my home 14 days or less in a year, I don't report that income. The 10% rule applies when I use the place myself and rent it out: if my personal use is more than the greater of 14 days or 10% of the days it's rented, the IRS treats it more like a personal residence, which limits how much loss I can claim. To report rental income, I use Schedule E, list all the rent I received, subtract all eligible expenses, and the net figure then flows into Form 1040 as part of my total income. My tax software or accountant then carries that through to any state return.
Rental income gets taxed as ordinary income by the IRS, but what many landlords don't realize is they can significantly reduce that burden through deductions like mortgage interest and property taxes. For example, if your rental brings in $25,000 annually and you have $20,000 in deductible expenses, you'll only pay taxes on the remaining $5,000. Keeping meticulous records of all income and expenses is key to making this process smooth and stress-free.
I, Seamus Nally, hereby give my permission to Rocket, LLC and its affiliates, agents, and partners ("Authorized Persons") to use my name, likeness, and any quotes, statements, or media I provide (collectively, "Materials") for marketing, advertising, or promotional purposes. This includes use on websites, social media, digital or print ads, and other marketing platforms. I understand that my quote(s) may be edited for clarity or length but will not be misrepresented. I confirm that my statements reflect my honest opinions and experiences. By sending this electronic email, I grant Rocket, LLC the right to use these Materials and my Likeness without further approval or compensation. I also release Rocket, LLC from any liability related to the use of this content as outlined above. Rental income is taxed as ordinary income. Any profits you earn from a rental property beyond just regular rent payments are included in this, like advance payments, any security deposit amount you keep, lease cancellation fees, etc. There is also a lot that you can deduct, and it's imperative that you have a system to track all of your expenses so that you can deduct as much as possible. Some of the most common deductions include mortgage interest payments, property taxes, utilities (if you pay them, not if your tenants pay them), maintenance costs, insurance premiums, legal fees, advertising fees, and depreciation. There are other fees that can be deducted too, but these are arguably the most common for the vast majority of landlords. When you deduct all of these costs, you can bring your taxable income down significantly and lower your tax bill quite a bit. It definitely helps to work with an accountant to make sure you've deducted as much as possible, and to make sure you are filling out the right tax forms. You'll typically need to report all of this on IRS Schedule E, and you'll be filling out a 1040 tax form.