Hello, I'm Scott from TurboTax with some important information about the income you may need to report on a Schedule E.
Do you rent out your home or other real estate to earn some extra money? Or, are you a partner in a partnership? If so, you may have an obligation to report some of your earnings on a Schedule E attachment to your tax return.
Schedule E is the form you use to report supplemental income you earn from any of the following sources: renting real estate; royalties; interests in partnerships and S corporations; and distributions received from an estate or trust as well as from certain mortgage investments.
Taxpayers commonly use the Schedule E to report the income they earn from renting out a house or even a room in the home they reside in.
But the one nice thing about reporting your rental income on Schedule E is that you get to deduct the expenses you incur for the rental property, which ultimately can reduce the amount of tax you will have to pay. Some of the expenses that are deductible include advertising costs, fees you pay to a management company, repair costs, and mortgage interest payments for the property.
In addition to reporting rental property income, Schedule E is also commonly used by taxpayers who are partners of a partnership. If you are a partner in a business venture, the partnership will report your share of business income, expenses, gains and losses on a Schedule K-1. If you receive this form, you will need to have it handy when filling out the Schedule E since the amounts you input on Schedule E will mirror those on your K-1.
And don't forget, if you are the beneficiary of a trust or estate and receive a Schedule K-1 that reports your earnings, deductions, or distributions, you may also have an obligation to report those on the Schedule E.
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