Taxes are complicated at the best of times, but they can become even more so when you need to take owner disbursements, local iniquities, and property taxes into account.
Although Nevada is a tax-friendly state, rated 7th in the US for its favorable tax climate, many investment property owners don't know where to start when it comes to filing taxes.
If you're one of these real estate owners, keep reading to find out about the tax documents that apply to you.
Tax Basics for Landlords
Landlords who profit from rentals must report their real estate income using the tax forms mandated by the Internal Revenue Service. This may vary depending on your situation, so it's best to consult a certified tax accountant for assistance with filing your taxes.
If you don't file your rental taxes correctly, you could incur costly penalties, interest, and fines, especially when it comes to 1099-K Form submissions.
Common Landlord Tax Documents
Nevada doesn't charge personal income tax, but the IRS has several tax requirements for landlords earning high rental rates from their investments. These are some of the tax forms related to renting real estate:
You'll need to complete several tax forms for your real estate business activities. We've outlined the most important ones below.
Form 1099-K
Form 1099-K is a mainstay of voluntary tax compliance. If you've earned over $600 in rental income in a year, you should receive one of these forms digitally or in the mail.
Form 1099-K is an information return used to report your income voluntarily. If you don't receive one, you must still report this income to the IRS on your tax return.
Previously, you only needed to submit this return after completing a minimum number of transactions. This rule no longer applies; you must submit Form 1099-K even if you only receive one payment of $600 or more.
Form 8825
Form 8825 applies when your rental business is incorporated as an S Corp. or a partnership. On this form, you'll report your income as well as any deductible expenses related to rental properties you own.
This form is also valid for rental real estate activities undertaken by partnerships, trusts, and estates.
Form 1040 or 1040-SR (Schedule E)
This form applies to all taxpayers filing their annual income tax returns. A property owner can use this form to report the following information related to their investment property:
- Rental income
- Deductible expenses
- Relevant MACRS depreciation
In some cases, you may need to attach extra schedules depending on the type of income you're reporting.
Navigate Tax Time the Easy Way
It's difficult to keep track of your income and expenses when you're a busy landlord, especially when you have several properties or business interests. Completing your tax documents is a breeze when you have everything you need at your fingertips.
When you hire Pure Las Property Management, our excellent record-keeping and reporting services ensure that's exactly what you get.
Get in touch with our professional, experienced team for assistance with every aspect of managing your Las Vegas investment rental property.