How are rental income treated in the tax return?
May 30, 2024 | 40,00 EUR | answered by Ralf Otten
Dear tax advisor,
My name is Marie Zimmermann and I have a question regarding my income tax return. I rent out an apartment and receive monthly rental income, which I would like to accurately report in my tax return. However, I have no experience with reporting rental income on my taxes and am unsure how to handle it.
Currently, I am unsure if I even need to pay taxes on the rental income and how I should report it in my tax return. I want to make sure I do not make any mistakes or evade taxes, but at the same time, I do not want to pay unnecessary taxes.
Could you please explain to me how rental income is treated in the tax return? What information do I need to provide and what documents do I need to submit? Are there ways to reduce the tax burden on rental income? I would appreciate a detailed consultation on this topic to ensure that I do everything correctly.
Thank you in advance for your help.
Sincerely,
Marie Zimmermann
Dear Mrs. Zimmermann,
Thank you for your inquiry regarding the treatment of rental income in your income tax return. I am happy to assist you with this issue and explain how you can correctly report your rental income in your tax return.
In Germany, rental income must generally be taxed as income from renting and leasing. As a landlord, you are required to report your rental income in the "Anlage V" of your income tax return. In this attachment, you must include not only the gross rental income but also your deductible expenses. Deductible expenses may include maintenance costs, management fees, property tax, insurance premiums, depreciation, and interest on loans taken out to finance the rental property.
To properly report your rental income in your tax return, you should gather all relevant documents. These may include rental agreements, bank statements, invoices for deductible expenses, receipts for maintenance costs, and insurance premiums. These documents serve as evidence for your claims in the tax return and should be kept safe.
To reduce the tax burden on your rental income, you can take advantage of various tax options. These may include depreciating acquisition and construction costs for the rented property, considering maintenance costs, and claiming deductible expenses. By managing these costs effectively, you can lower your tax burden and pay less tax on your rental income.
I recommend consulting with a tax advisor in a personal meeting to discuss your individual situation. A tax advisor can help you maximize all tax options and avoid errors in your tax return.
I hope this information helps you and answers your questions regarding the treatment of rental income in your tax return. If you have any further questions, please feel free to contact me.
Best regards,
Ralf Otten
