What should be considered in the tax treatment of rental income?
October 11, 2023 | 40,00 EUR | answered by Robert Lehmann
Dear Sir or Madam,
my name is Erika Schlosser and I have a question regarding the tax treatment of rental income. I have been renting out an apartment for several years and have been earning regular income from it. So far, I have simply received the rental income deposited into my account without further consideration of the tax aspect.
However, I am now concerned that I may have neglected potential tax obligations and may need to pay taxes retroactively. I am unsure about how rental income should be treated for tax purposes and what specific rules or exemptions may apply in this area.
Therefore, I would like to know what tax aspects I need to consider when renting out my apartment. Are there any specific allowances or deductions that I can claim? How should I report the rental income in my tax return and what are the consequences if I have failed to do so in the past?
I would greatly appreciate it if you could assist me and provide possible solutions to clarify my tax affairs related to my rental income. I want to ensure that I comply with my tax obligations correctly and avoid any potential repayments or penalties.
Thank you in advance for your help.
Sincerely,
Erika Schlosser
Dear Mrs. Schlosser,
Thank you for your inquiry regarding the tax treatment of rental income. It is very important to take care of the tax matters related to renting out a property in order to avoid potential back payments or penalties.
In general, rental income is subject to income tax. This means that you must declare the income from renting out your property in your annual tax return. You are required to accurately record the rental income and, if applicable, also claim expenses such as advertising costs or maintenance expenses.
There are certain allowances and deductions that you can take advantage of to reduce your tax burden. For example, you can deduct expenses such as repair and maintenance costs, management fees, property tax, or insurance premiums from the rental income. Depreciation on the acquisition and production costs of the rented property is also tax deductible.
If you have not declared your rental income in your tax return so far, you may have neglected your tax obligations. In this case, I strongly recommend that you contact a tax advisor or a specialist lawyer in tax law to clarify your tax situation and avoid potential back payments.
It is important that you take your tax obligations seriously and properly declare your rental income in your tax return. By correctly recording and handling your tax affairs, you can avoid potential risks and inconveniences.
I hope that this information was helpful to you and I am available for any further questions you may have.
Kind regards,
Robert Lehmann
Tax Lawyer
