What do you actually end up paying in taxes?

[Derek Luttrell]

Hi All,

I am under contract on my 3rd acquisition in 2018, so I have yet to actually file a tax return with rental income on it. Is there a general rule of thumb for how much you actually pay in rental income tax after all the deductions? Say your property shows a $5,000 annual profit on paper, once you consider the write-offs like depreciation, mortgage interest, property tax, etc, what kind of tax bill should you expect?

Especially curious because I aspire to one day live off of rental income, so I'd like to get an idea of how much of the profits you actually take home at the end of the year. 

[Caleb Heimsoth]

Derek Luttrell if you overpay taxes slightly like most Americans from your day job and have residential rentals that are conventional financed with the depreciation and mortgage interest and repairs etc you’ll probably pay nothing your first few years.

Since you’re buying this year you won’t get a full year of depreciation on any of these, so you may pay a bit less but it’s not gonna be a lot.

Any income you show after repairs, depreciation and mortgage interest is taxed at your income bracket at the personal level.

There’s a tax book by Amanda Han I bought last night for 10 bucks on kindle. If you read that it’ll probably tell you all you need to know