TurboTax is a highly applauded tax preparation software in Canada. It is integrated with so many strong features that make tax season cool and easy. Out of numerous features, claiming the rent is one of the main features. If you don’t know how to do that already, then today will figure out “How to claim rent on TurboTax” all with ease.
Claiming rent on TurboTax is imperative and does not require much proficiency over taxation. The amount received from the rented property must be reported as the income on your taxes. This rent amount can also be deducted as your rental expenses, this can further reduce your tax liability.
There are different types of expenses that can be subtracted in the year you spend money. Depreciation is entirely different from it. Depreciation indicates the process of deducting the cost of buying or improving a rental property. It is about allocating the cost of property, not assessing its value. You can depreciate your asset even if it doesn’t demand maintenance.
With the TurboTax software, it is very easy for you to claim the rent on the property. But it is very important that you should know where to place the income and expenses from a rental property. In case the rental property is located outside state limits, ensure that you configure that state correctly in the personal information section. It helps in the preparation of your state taxes with the below-mentioned procedure.
Check out this video on how you can deduct rental property expenses using this step by step tutorial:
The rent received on the property is considered as the income in the year you received it, not for the year it applies to. It means that the rent payment for the month of Jan. 2018 received in Dec. 2017 will be reported on the return for the year 2017.
The rent amount for your personal residence is not deductible on your federal tax return. This is not even entered on the federal return, though in some states it is allowed. In case it is allowed in your state, it will be covered in the state interview when you prepare your state return.
Now that you know, how to claim rent on TurboTax, its time to exempt the claimed rent. This can be better explained with the help of an example.
In Ontario if you are being paid 8000 dollars all in rent then here is how you will account that. Follow the below-given steps as this will help you figure out how to claim rent exempt in TurboTax.
In Ontario you can easily claim any credit related to your taxes for any amount paid on your primary residence. If you are a senior person in your family and is living in nursing homes then you can easily claim your credits with ease and nobody can question that.
The tax credit is based on your adjusted family net income and is reduced when your income exceeds a specific amount based on your family scenarios. The students are benefitted and so they can claim a flat tax credit of $25 for living in student residences.
You can claim the Ontario Energy and Property Tax Credit in case you have an average income and you live in Ontario. This credit helps with taxes that relates with your rent and property. The maximum credit that you can ask for under this provision is $1,008. This figure includes $784 towards your property taxes and $224 towards your energy consumption.
The senior family members of 65 years of age or older claim a maximum of $1,148 that involves $924 to assist with property taxes and $224 to assist with the consumption tax on an energy bill. You can claim a maximum of $224 if you reside in a public nursing home. For the student, you can claim of $25 for the time period during the year you live in a college, university or private school residence. These tax credits are raised up each year taking inflation into account.
To get eligible for the tax credit:
Your tax credit amount is determined by the below-given factors:
This tax credit is reduced by 2 percent when your adjusted net income of the family net is above. Below is the slab provided:
Tax credit can also be applied by filling out ON-BEN form. The form includes details on personal income tax and benefit return. It is imperative, filing your tax return even if you do not have a balance owing, as this is a refundable tax credit. You can receive it, even if you do not have any taxable income. You can file your tax return on time because filing after April 30 may delay your payment.
Hope you are now much sorted with your query on “How to claim rent on TurboTax”. But if you are still in doubt then you can talk to our Quickbooks proadvisors.
For further information and assistance contact Intuit customer support that hires qualified TurboTax experts. You can have instant support with in-depth knowledge on the tax preparation. You can reach the support team by phone support or live chat option.
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