Free Rental Property Tax Calculator

Estimate taxable rental income and tax owed after deducting expenses and depreciation.

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Taxable Rental Income

$7,000

Estimated Tax Owed$1,680
Total Deductions$29,000
Rental Loss (If Applicable)$0

Taxable Rental Income vs Mortgage Interest Paid

View formula & how it works →

Rental Property Tax Estimation

Rental income is taxed after deducting operating expenses, mortgage interest, and depreciation.

Formula

Taxable Income = Gross Rent - Expenses - Interest - Depreciation

Tax Owed = Taxable Income x Marginal Rate

Key Deductions

  • Property taxes, insurance, management fees, repairs
  • Mortgage interest (not principal)
  • Depreciation on the building (not land)
  • If taxable income is negative, the loss may offset other income (subject to passive activity rules)

    • Example Calculation

    $36,000 gross rent with $12,000 expenses, $8,000 interest, $9,000 depreciation, at 24% tax rate.

    1. 01Total deductions: $12,000 + $8,000 + $9,000 = $29,000
    2. 02Taxable rental income: $36,000 - $29,000 = $7,000
    3. 03Estimated tax: $7,000 x 24% = $1,680
    4. 04The depreciation deduction saved $9,000 x 24% = $2,160 in taxes

    Frequently Asked Questions

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