Build the rental result from reportable income
Include rent actually required to be reported, plus the fair market value of property or services received as rent and other rental receipts that belong in the modeled year. Security deposits intended to be returned are generally different from advance rent, so classify deposits from the lease and facts before entering them.
This page assumes a conventional activity reported on Schedule E. Rentals with substantial services, dealer activity, farm rent, partnership ownership, or certain short stays can use different forms and tax treatment.
Separate cash expenses, interest, and depreciation
Enter ordinary operating deductions apart from deductible mortgage interest and depreciation so the result can show their different effects. Principal payments are not mortgage-interest deductions, capital improvements are not current repairs, and land is not depreciated.
The after-tax cash result subtracts operating expenses, interest, and estimated tax but not depreciation because depreciation is noncash in this simple view. It does not model principal, capital spending, reserves, or sale proceeds, so it is not an investment cash-flow forecast.
Passive losses are an input, not an automatic deduction
Rental activity is generally passive unless an exception applies. At-risk rules can apply before passive-loss rules, and Form 8582 may limit the current deduction. The calculator therefore asks for the amount of prior passive loss already determined to be allowable this year rather than guessing from AGI or participation.
If the current inputs produce a loss, the page reports that loss but does not convert it into an immediate tax saving. Active-participation allowances, real-estate-professional treatment, disposition release, basis, and carryforwards require the full return facts.
Choose marginal and NIIT rates deliberately
The marginal federal rate is a scenario assumption, not an average tax rate. Use the rate applicable to the next dollar of taxable income after considering the rest of the return. EstateCalc does not infer filing status or 2026 taxable-income brackets.
Enter NIIT as 0 unless the income belongs in net investment income and the taxpayer is above the applicable MAGI threshold; enter 3.8 only for a scenario where it applies. Limit the NIIT-applicable income field to the amount actually exposed after the MAGI threshold and other Form 8960 facts.
The state field applies one marginal percentage to modeled taxable rental income. It does not reproduce state brackets, additions, subtractions, passive-loss rules, credits, local tax, or nonresident allocation.
Reconcile the estimate to Schedule E
Compare gross income, expense categories, mortgage-interest statements, and Form 4562 depreciation with the property column on Schedule E. Keep invoices, settlement statements, mileage records, allocation workpapers, and evidence supporting personal versus rental use.
Use the calculation link to share assumptions with a preparer, then replace the entered passive-loss and rate assumptions with amounts determined from the complete return. The IRS form result can differ materially even when the arithmetic here is correct.
Reviewed methodology and sources
The methodology is reviewed for the stated version. The result remains a scenario estimate and depends on the inputs and applicable rules.
Rental Income Tax Calculator FAQ
Is rental income taxed on gross rent?
Generally deductible rental expenses and depreciation reduce rental income, subject to classification and limitation rules. The calculator shows both gross and net amounts.
Can I deduct the mortgage payment?
Not as one amount. Potentially deductible interest is separate; principal is not a current expense. Enter only the interest amount determined to be deductible for the rental activity.
Does a rental loss automatically reduce my salary income?
No. At-risk and passive-activity rules can suspend a loss. Enter only a prior passive loss already determined to be allowed, and treat a newly calculated loss as unverified.
Should I enter 3.8% for NIIT?
Only for a scenario where the taxpayer exceeds the applicable MAGI threshold and the rental income is included in net investment income. Otherwise enter 0.
How is state tax estimated?
The model applies one entered state marginal rate to modeled taxable rental income. It excludes state brackets, adjustments, credits, local tax, and allocation rules.
Continue the property analysis
Compare this result with adjacent metrics, keeping each formula’s income, expense, and financing scope consistent.