It depends. If you are referring to a higher refund, then there could be many reasons for that. The facts and circumstances on your return make the difference and no two tax returns are alike. However, if you have dependent children the income level can make a difference when the earned income tax credit (EITC) comes into the picture. Or if the child tax credit (CTC) is being used for children under 17 years of age.
Also, if you rented a portion of your personal residence and you had expenses it's very important to answer the appropriate questions when you enter your rental property. Another question is whether this is considered short term rentals, with substantial services which would make the income subject to self employment rules.
- Should I report my rental on Schedule C or Schedule E?
- Schedule E allows passive activity losses against other income if you meet the income levels. Phaseout Rule: The maximum special allowance of $25,000 ($12,500 for married individuals filing separate returns and living apart at all times during the year) is reduced by 50% of the amount of your modified adjusted gross income that’s more than $100,000 ($50,000 if you’re married filing separately). If your modified adjusted gross income is $150,000 or more ($75,000 or more if you’re married filing separately), you generally can’t use the special allowance. This is because the special allowance is reduced to $0 since the modified adjusted gross income is over the $100,000 amount.
- Schedule C, if there is a profit, would require self employment tax in any profit year or years.
Report the full amount and if some of the income reported is an expense to you then you should deduct those expenses.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
