Itemized Deductions are personal expenses entered on Schedule A. If you have a rental property, you take expenses against your income on Schedule E.
Deductions are taken in the Deduction and Credit section of the program. You will be asked about your home, charity, medical, etc.
You don't itemize anything on SCH E. Never. All rental income and rental expenses are reported on SCH E. There's no such thing as "itemized deductions" on SCH E. All rental expenses are claimed/deducted on SCH E. Period.
Note that your SCH E will always show a loss, every single year. It is "extremely" rare for rental property to ever show a taxable profit on paper. In fact, when it comes to taxes rental property operates at a loss *on paper". Especially if there's a mortgage on the property. When you add together the deductible mortgage interest, property insurance, property taxes and the depreciation you are required to take by law, it will always exceed the rental income received for the year. Add to that your other allowed rental deductions for things like repairs and maintenance, and you're practically guaranteed those dedeuctions will exceed the rental income.
Since rental income is passive, your rental deductions can only be deducted from that income. Once your expenses get the taxable rental income to zero (and it will) any excess deductions are just carried over to the next year.
So with each passing year your rental deduction carry over amount is guaranteed to increase and grow. You can't actually "realize" the carry over amount until the tax year you sell the property. Only in that year can your excess deductions be deducted from other, ordinary income.
I am in Turbo Tax website and want to know how to view/access Schedule E. Thanks!
Just want to know how to access Schedule E when in the Turbo Tax website. I thought it was under "tools" but I cannot see it? Thanks!
@ZEBRA53 wrote:
I am in Turbo Tax website and want to know how to view/access Schedule E. Thanks!
Enter rentals in the Search box located in the upper right of the program screen. Click on Jump to rentals
You may need to upgrade to Premier to see it.
If you're also filing a nonresident state return to report income from an out-of-state rental property, be sure to complete your nonresident state return before you prepare your resident state return when you get to the State Taxes section.