Rental Income Tax Calculator
Estimate your federal tax on rental income with deductions for depreciation, mileage, expenses, and QBI. Uses 2026 IRS brackets and standard deductions.
QBI Deduction: Most rental landlords qualify for a 20% deduction on net rental income under Section 199A. Check this box if your rental activity qualifies -- it could save you $110 in taxes.
Tax on Rental Income
$550
Additional federal tax from rental income (total tax: $8,220)
Effective Rate
10.6%
Marginal Rate
22%
QBI Deduction
$0
PAL Status
Rental Profit
Without Rental
$7,670
On $75,000 income
With Rental
$8,220
On $77,500 AGI
Tax Breakdown
W-2 / Other Income$75,000
Gross Rental Income$36,000
Less: Rental Expenses-$24,000
Less: Depreciation-$8,000
Less: Mileage-$1,500
Net Rental Income$2,500
Adjusted Gross Income$77,500
Less: Standard Deduction-$16,100
Taxable Income$61,400
Federal Tax$8,220
Automate tax tracking, depreciation schedules, and 1099 generation for all your rentals
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Passive Activity Loss Calculator
Your $25,000 rental loss allowance and MAGI phase-out, the Form 8582 way.
Frequently asked questions
How is rental income taxed?
Net rental income — your rent collected minus deductible expenses, depreciation, and mileage — is added to your other income and taxed at your ordinary federal income tax rate. There is no separate "rental tax" rate; it flows onto Schedule E and into your 1040. Because depreciation and operating expenses are deductible, your taxable rental income is often far lower than the cash you actually pocket.
What is the QBI deduction and do landlords qualify?
The Qualified Business Income (QBI) deduction under Section 199A lets eligible landlords deduct up to 20% of their net rental income. Rentals that rise to the level of a trade or business — often documented via the IRS safe harbor of 250+ hours of rental services per year — generally qualify. Whether your specific activity qualifies is fact-dependent, so treat the result here as an estimate, not tax advice, and confirm with a CPA.
Why can't I deduct my full rental loss?
Rental real estate is a passive activity, so losses are limited by the Section 469 passive activity loss (PAL) rules. Most landlords can deduct up to $25,000 of rental losses against other income, but that allowance phases out between $100,000 and $150,000 of modified AGI (halved and lower for married-filing-separately). Losses you can't use this year aren't lost — they're suspended and carry forward to offset future rental income or the eventual sale.
Does depreciation reduce the tax I owe now?
Yes. Residential rental buildings are depreciated over 27.5 years, and that annual depreciation is a deduction that lowers your net rental income even though it isn't a cash expense. The trade-off is depreciation recapture: when you sell, the depreciation you claimed is generally taxed at up to 25%. This calculator estimates your current-year tax only and does not model the tax due at sale.
How accurate is this estimate?
It uses 2026 IRS federal brackets and standard deductions to approximate your federal income tax on rental income, including QBI and the passive-loss allowance. It does not include state income tax, self-employment tax, the Net Investment Income Tax, AMT, or itemized deductions. Use it for planning and ballpark figures — it is an estimate, not tax advice, so confirm your situation with a CPA.