How much is my rental income tax?

How it works

1. Expenses = mortgage interest + property taxes + other expenses (empty boxes count as $0).
2. Depreciation = building cost × the 2026 percent ÷ 100. Placed in service before 2026: 3.636%. Placed in service in 2026, the first-year percent of Table 2-2d for that month: January 3.485%, February 3.182%, March 2.879%, April 2.576%, May 2.273%, June 1.970%, July 1.667%, August 1.364%, September 1.061%, October 0.758%, November 0.455%, December 0.152% (each is (12.5 − month number) ÷ 330, rounded to 3 decimals as the table prints it).
3. Net rental income = rent − expenses − depreciation. Below $0 it is a loss.
4. Special allowance for a loss:
   • $0 if you do not actively participate;
   • married filing separately: $0, or $12,500 − 50% × (other income − $50,000) if you lived apart from your spouse all year;
   • every other filing status: $25,000 − 50% × (other income − $100,000);
   • never below $0, and the subtraction applies only when other income is above $100,000 ($50,000). Other income is taken as your modified AGI for this purpose. Publication 925 figures this modified AGI without any passive activity income or loss (the Form 8582 amounts), so the rental loss itself does not raise the allowance.
5. Rental income on your return = net rental income when it is $0 or more; for a loss, minus the smaller of the loss and the special allowance.
6. Loss carried to 2027 = the loss − the part deducted (0 when there is no loss).
7. Federal tax on the rental = the 2026 federal tax with the rental income on your return − the tax without it. Both returns have your other income as ordinary income (not wages), the standard deduction ($16,100 single and married filing separately, $32,200 married filing jointly and qualifying surviving spouse, $24,150 head of household) and no credits; tax on taxable income below $100,000 follows the Tax Table (the 2026 rate schedule at the middle of the income's row: rows of $0 to $5, $5 to $15 and $15 to $25, then $25 rows up to $3,000 and $50 rows from $3,000, rounded to whole dollars, half up), and the exact rate schedule from $100,000. The rental income or loss is investment income for the 3.8% net investment income tax on the lesser of net investment income (not below $0) and modified AGI over $200,000 ($250,000 joint and surviving spouse, $125,000 separately).
8. Marginal tax rate = the rate of the highest 2026 bracket whose floor is at or below your taxable income with the rental (0% when that taxable income is $0).
9. Net investment income tax part = that tax with the rental − without it.

Rental amounts are exact decimals of what you typed; the federal tax uses the site's tax engine, which works in floating point, and the results show to the cent. If net rental income, depreciation, the rental income on your return, the loss carried to 2027 or the special allowance is not $0 but too small to show as a number, there is no answer: 'A result is too small to show as a number: check the amounts.'

Figures that change each year

When the data is out of date

After April 15, 2027 the page keeps using the 2026 tax tables and says so above the result.

Assumptions

• Tax year 2026, federal tax only, one residential rental held for rent all year with no personal use, reported on Schedule E. Not a real estate professional.
• Other income is ordinary income such as wages, with the standard deduction and no credits, and is your modified AGI for the allowance (no IRA deduction, student loan interest or taxable Social Security).
• Placed in service before 2026 uses 3.636% (Table 2-2d years 2 to 9; from year 10 the table alternates 3.636% and 3.637%, and a building fully depreciated after 27.5 years has none left). No losses carried from earlier years. Every amount is at most $1 trillion. An estimate, not tax advice.

Worked examples by hand

Single, $90,000 of other income: $30,000 of rent, $9,000 of interest, $3,500 of taxes, $5,500 of other costs, a $220,000 building owned before 2026. Depreciation = 220,000 × 3.636% = $7,999.20; net = 30,000 − 18,000 − 7,999.20 = $4,000.80. Without the rental: taxable income 73,900, row middle 73,925: 1,240 + 4,560 + 22% × 23,525 = 10,975.50, so $10,976. With it: 77,900.80, row middle 77,925: 11,855.50, so $11,856. Tax on the rental = $880; marginal rate 22%.

Married filing jointly, $120,000 of other income: $18,000 of rent, $22,000 of expenses, a $275,000 building. Depreciation = $9,999; net = 18,000 − 22,000 − 9,999 = −$13,999. Allowance = 25,000 − 50% × 20,000 = $15,000, so all $13,999 is deducted. Taxable income falls from 87,800 (row middle 87,825: $10,043) to 73,801 (row middle 73,825: $8,363): tax on the rental = −$1,680.

The same rental, single, $140,000 of other income. Allowance = 25,000 − 50% × 40,000 = $5,000; deducted $5,000; carried to 2027 $8,999. Taxable income of $123,900 is in the 24% bracket, so the tax falls by 24% × 5,000 = $1,200.

Single, $60,000 of other income: $24,000 of rent, $5,000 of expenses, a $165,000 building placed in service in April 2026. Depreciation = 165,000 × 2.576% = $4,250.40; net = $14,749.60; tax on it = $2,587.