How do I report rental income in my tax return?
January 24, 2024 | 40,00 EUR | answered by Wolfgang Stricker
Dear tax advisor,
My name is Alice Evers and I have a question regarding my tax return. For some time now, I have been renting out a property and receiving regular rental income. However, I have never been sure how to declare this income in my tax return. I am worried that I might be doing something wrong and end up in trouble with the tax authorities.
My situation is as follows: I rent out an apartment that I own and receive monthly rent payments from my tenant. I have never declared rental income in my tax return before because I am unsure of the correct way to do so. I want to make sure that I declare everything correctly and legally to avoid any issues with the tax authorities.
My concerns are that I am not sure which forms to fill out and what information to provide. I have heard that rental income is taxable, but I am unsure of how to properly declare it. I want to avoid having to pay back taxes or even penalties for incorrect information.
So my question to you is: How do I declare rental income in my tax return? Which forms do I need to fill out and what information is required? Are there any specific regulations or exemptions that I should be aware of? I would greatly appreciate your help in correctly declaring my rental income in my tax return to avoid potential issues.
Thank you in advance for your assistance.
Sincerely,
Alice Evers
Dear Mrs. Evers,
Thank you for your question regarding the declaration of rental income in your tax return. As a tax advisor, I would like to help you properly declare your income to avoid any potential issues with the tax authorities.
First and foremost, it is important to understand that rental income is generally subject to taxation. This means that you must declare the income from renting out your property in your tax return. There are specific forms that you must fill out in order to accurately record the rental income.
In your situation, where you are renting out an apartment, you must declare the income from rental and leasing in Annex V of your tax return. There, you will enter the amount of rental income and can also claim deductions for advertising costs. Advertising costs are expenses related to renting out the property, such as maintenance costs, management fees, or depreciation.
It is important that you carefully document all income and expenses and keep receipts in order to prove the accuracy of your declarations in case of an audit by the tax authorities. You should also be aware that you may have to pay value-added tax on rental income if you are subject to VAT.
There are also allowances and standard deductions that you can claim when renting out properties. For example, you can claim a standard deduction of 30% of income if you cannot prove higher advertising costs. The basic tax-free allowance of currently 9,744 euros per year can also be applied to rental income.
Overall, it is important that you accurately and carefully declare your rental income in your tax return to avoid any potential issues with the tax authorities. If you are unsure or have any further questions, I am at your disposal.
Best regards,
Wolfgang Stricker, Tax Advisor
