So we have a renter that for a few months paid via PayPal/Venmo/ApplePay Cash, and total rent was <20K so there was no 1099. They they paid via cashier's checks, and the bank let me encash in a way that the amount never showed up on my account. Now the bank says they have to deposit the money in the account, to maintain traceability, which makes total sense. (wondering why they realized so late) So at what stage should I show this as rental income. The PayPal money and stuff I encashed, I have no paper trail of that money. Now that checks are showing up periodically in my account, whats the recommended way to show this as "income". I mean there's no 1099 here, no W2. Is it totally up to me? Someone's gotta be monitoring this. OR does IRS not care about anything < 10K.
What if IRS finds out the market rental in the area while you’ve been reporting a fraction of that amount. The recommended way is to be truthful.
Personal finances are usually done on a cash basis, so recognize the income when you receive the payment. PayPal, Venmo, and ApplePay cash do have paper trails, the IRS can easily get them in an audit. If you are in California, renters report payments to the FTB, if you don’t report the income, they will eventually find you. It’s business income, there doesn’t have to be a 1099 or W2 for you to still need to pay taxes on the income.
Rental incomes are reported on Schedule E form with your 1040. But I’m not sure if one unit qualifies for someone to file Schedule E. TurboTax has a section for filing rental income.
Just stop cheating and pay your taxes! It’s people like that who give Asian Americans a bad reputation.
My username tells you i’m asian? Good logic but thats not the case.
Any rental income should be reported in schedule E. Usually with property taxes, expenses and depreciation you will end up paying no tax so why not do the right thing? Also you get QBI (trump introduced this last year) tax deduction (quite substantial) with rentals that helps reduce overall tax.
Thanks that’s helpful.
Consider it a gift. I’m not joking
Id love to, but the income is not worth getting into trouble later. I also understand my tax person is a better source for such info, just getting a feeling of the community here.
Ask him about gift