Schedule E: reporting rental income

If you rent out a house or apartment, you usually report the rent and the expenses on Schedule E (Form 1040), Part I, one column per property. Here is what goes where, based on the 2025 form and IRS Publication 527 (checked October 2026).

What counts as rental income

Rent you receive during the year goes on line 3, Rents received. Most individual landlords use the cash method: report rent in the year it is received.
Advance rent is income in the year you receive it, whatever period it covers.
Security deposits you plan to return are not income when received. The part you keep, for example because the tenant broke the lease, is income in the year you keep it.
Lease cancellation payments from a tenant are rent.
Expenses the tenant pays for you are rental income, and you may deduct them if they are rental expenses.

Expense lines on Schedule E

Line	Expense
5	Advertising
6	Auto and travel
7	Cleaning and maintenance
8	Commissions
9	Insurance
10	Legal and other professional fees
11	Management fees
12	Mortgage interest paid to banks, etc.
13	Other interest
14	Repairs
15	Supplies
16	Taxes
17	Utilities
18	Depreciation expense or depletion
19	Other (list)
20	Total expenses (lines 5–19)
21	Line 3 minus line 20

Repairs keep a property in working order and are deducted in the year paid. Improvements that add value or extend its life are capitalized and depreciated over time, so keep their costs separate. Depreciation (line 18) usually comes from Form 4562; ask a tax professional if you are unsure.

Records to keep

A ledger of rent received from each tenant, with dates.
Receipts and invoices for every expense, by property.
Closing statements and improvement costs, for depreciation and the sale.

With RentLedger HQ Pro, rent you record through the year is added up per property, and you can log expenses by Schedule E line. At tax time you get a worksheet (PDF or CSV) with line 3, lines 5–17 and 19, total expenses and the result before depreciation, ready for you or your preparer.

Do late fees count as rent on Schedule E?

Late fees and other amounts tenants pay you for the use of the property are generally part of rental income. Ask your tax preparer if you are unsure about a specific charge.

Do I file Schedule E for a single rental unit?

Generally yes, if you rent it out as an individual landlord. Some short-term or personal-use rentals follow different rules; see IRS Publication 527.

Is this tax advice?

No. It is a summary of the IRS form and publication for general information. Talk to a tax professional about your own return.

Sources: IRS Schedule E (Form 1040), 2025; IRS Publication 527, Residential Rental Property (2025).