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RENTAL INCOME & TAXES by TOM (NY) on February 13, 2009 @22:38

                              
i am a new landlord . i rent a small condo apartment i own. it seems to me that it is pretty simple to get a way with not declaring rental income on your income tax returns. (not that i have any intention of doing that, of course) it's not like you get a W-2 or a 1099 that the government knows about. all i get is a check from my tenant every month. how would the government know whether or not I'm renting out my apartment. aren't i correct? am i missing something.

thanks

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Re: RENTAL INCOME & TAXES by George B (WNY) on February 13, 2009 @22:48 [ Reply ]
You can get away with it until it catches up with you.
If the gov audits you, they may want to see deposits in your bank account.
Tax evasion can = jail time. Is it worth it?
Re: RENTAL INCOME & TAXES by Pairofjacks (GA) on February 13, 2009 @23:58 [ Reply ]
Chances are, you would actually see a tax benefit from the mortgage interest you pay on your rental property....even though you claim rental "income", because of the tax formulas, typically you will show a "loss" once you do your taxes, which actually lowers your total tax liability.

I used to only owe my primary home...but once I started including my rental property on my tax return, my refund actually was more!

I do my own taxes on TaxActonline.com
It makes it very easy to file your own taxes.

Re: RENTAL INCOME & TAXES by D-bone (aka Debbie) (IL) on February 14, 2009 @00:28 [ Reply ]
Why would you want to consider that option, Tom?

There are ways for the IRS to find out. You and your tenant both already left behind paper trails. Heck, just by posting your thread, anyone who works for IRS seeing it can easily "tag" your IP address and trace it back to you!

I'm going to assume that you'll do the honest way.

I file every year since I started working as a teenager. If it's any consolation to you, I received refunds of over $10K per year in the past 4 years. Since I became a landlord, I had to pay the state once for a measly $34.00. I never had to owe the federal and hopefully never will have to.

Re: RENTAL INCOME & TAXES by Terry (ca) on February 14, 2009 @02:08 [ Reply ]
Trust me they have ways of finding out and BESIDES with just one rental wouldn't you want to take the deductions for DEPRECIATION (oh wait with a condo not much probably) and other expenses against it so net wouldn't be that much so report it using Schedule E. Better make sure your insurance knows too.
Re: RENTAL INCOME & TAXES by flee (MI) on February 14, 2009 @08:07 [ Reply ]
You would need to declare income as IRS has just about unlimited power to ruin lives and businesses. Fines, penalties, and interest accruals all stack up together for horrendous cost. They have power above all else and going b.k. won't protect you. It's hilarious to read posts describing the wondrous IRS as getting some money back. Within reality it's a plague upon society and dangerous. Think about the cost vs advantages. Most citizens fear IRS above all. You do realize Founding Fathers documents put forth a definition of gov't to further the enjoyment of its citizens. Why have we created such a beast? Class warfare? Getting a payoffs? Politics? Ya, pretty much all of that....it's the darkest of humanity thinking wrong headed.

Much better ways to finance gov't. Much more cost efficient methods which would do away with the whole horrible process. We desperately need better education and bring intelligence society together to improve our lot and in doing so increase quality of life. We should demand cost effective and efficient gov't. We should demand more freedoms and more personal responsibilities.

If your not planning on becoming a long term Landlord and it this is a temporary status, just declare income as "other". You won't be able to depreciate, but that will be captured later anyways under capital gains. You may very well have lower tax rate now. Also, the tax rate in country is expected to explode in future. So better take income now may be the smartest tactic. But who knows....you see another disadvantage of Income tax system is politicians are pulling tricks trying to manhandle economy and livelihoods in attempt to get re-elected....it really is a horrible process. Politicians always mess with the economy to gain fame (right or wrong) and in process always damage economy. Nothing smarter than a well informed consumer public armed with easy and accurate consumer info to make investment and purchasing decisions. This is well documented the intelligence of the educated masses. Regulations need to tweaked continually to ensure effectiveness and simplicity.

Re: RENTAL INCOME & TAXES by BOB on February 14, 2009 @08:19 [ Reply ]
Tom,we screen tenants to move into our units one thing we screen for is income and when we find that a tenant is falseafying info we disquilify them right? What examble to we set by cheating ? Besides going to Jail or getting caught and paying fines.How can you think this way? When you buy your next property I would think the bank would like to see good Income.
Re: RENTAL INCOME & TAXES by anonymous (ca) on February 14, 2009 @20:46 [ Reply ]
You can evade taxes on rental income by not reporting the income but that would not be legal. Report your rental income and then take full advantage of all deductions that then come with it.

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