How is rental income taxed?

[Bryan Proffitt]

Going to close on my first investment and looking to get some good insight on how rental income is taxed and how to offset taxes as much as possible. Rent will be going to pay back LOC, to reuse and possibly use again to buy another with possibility if using equity from first to buy a third. Sound advice appreciated.

Thanks

[Jaysen Medhurst]

Rental income is taxed as regular income, @Bryan Proffitt, but you don't pay Social Security or Medicare taxes. You should also look into Qualified Business Income (QBI). There are some requirements/limitations, but this will exempt the 1st 20% of profits. Then, of course, there's the depreciation.

All and all, depending on your circumstances, $1 of rental income can equal $1.20-$1.40 of earned income. Ain't REI grand?