Filling out Schedule E for the first time can definitely feel overwhelming, but breaking it down helps!
For your vacation rental expenses, here’s how they typically fit:
Furniture (sofa, bed, tables, etc.) → These are assets and should be depreciated over time. The IRS has specific guidelines on how many years each type of furniture is depreciated.
Decorations (curtains, wall art, etc.) → These can also be depreciated if they are significant expenses, but small decorative items might fall under supplies or miscellaneous expenses.
Linens (sheets, towels, bedspreads, etc.) → These are typically supplies and can be deducted in the year purchased.
Toiletries & Consumables (toilet paper, paper towels, guest gifts, shampoo, etc.) → These are operating expenses, as they are used up quickly and need to be replenished.
For a complete breakdown, the IRS Schedule E instructions provide specific details. Also, checking with a tax professional can ensure you're categorizing everything correctly.
By the way, if you’re looking for quality home essentials like linens, covers, and decorations, www.ozsupermart.com.au has some great options. Hope this helps—good luck with your filing!
