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Rental Income Tax Estimator

Estimate tax on rental activity by subtracting operating expenses, deductible interest, and allowed depreciation from gross rental receipts, then applying a rate you enter. The breakdown is useful for cash reserves and scenario planning because it distinguishes cash expenses from depreciation.

Actual rental tax treatment may include passive-loss limits, personal-use allocation, local taxes, depreciation rules, carryovers, and recapture. This page estimates current tax on positive net rental income only.

Enter your assumptions

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Result
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Estimated result
Gross rental income—
Total modeled deductions—
Net taxable rental income—
Estimated tax—

1. Use one tax period
Enter all income, deductions, payments, and rates for the same tax year or modeled period.

2. Enter the source amounts
Use records or a prepared estimate rather than mixing gross and net figures.

3. Apply the correct treatment
Choose rates and deductions that match the jurisdiction, taxpayer, asset, or entity being modeled.

4. Review the breakdown
Check intermediate values for duplicated deductions, missing payments, or an unintended zero result.

5. Test another scenario
Change one assumption at a time to see which input drives the estimate; use Reset to restore defaults.

Gross rental income = Rent + Other rental income Modeled deductions = Operating expenses + Deductible interest + Allowed depreciation Net taxable rental income = max(0, Gross rental income − Modeled deductions) Estimated tax = Net taxable rental income × Tax rate

What the result means

The displayed result applies only to the assumptions entered and the simplified calculation shown above.

This is a planning estimate, not tax advice. Tax rules vary by jurisdiction, entity type, filing status, holding period, deductions, credits, and tax year.

Given: Rent of $36,000, other income of $1,200, operating expenses of $11,500, interest of $6,200, depreciation of $7,200, and a 24% rate.

Calculation: Gross income = $37,200. Deductions = $24,900. Net rental income = $12,300. Tax = $12,300 × 0.24 = $2,952.

Result: Estimated tax on the modeled rental income is $2,952.

Should the security deposit be included?

Include it only when it is treated as rental income under the applicable rules, such as when retained rather than expected to be returned.

Where do repairs and improvements go?

Ordinary repairs may be operating expenses, while improvements may need to be capitalized and depreciated. Classify them before entering totals.

Can mortgage principal be deducted?

Loan principal generally is not an expense deduction merely because it is paid. Interest may be deductible subject to applicable rules.

What happens when expenses exceed rental income?

The calculator shows zero current taxable rental income. The actual loss may be limited, suspended, carried forward, or usable against other income.

Does this include tax on sale of the property?

No. Gain, depreciation recapture, transfer taxes, and selling costs belong in a separate property-disposition calculation.