Don’t forget that you’ll most likely need to pay taxes to Florida for renting your property. Here is a cut/paste from ChatGPT for your consideration.
Renting out a home in Florida as a landlord has several tax implications at both the federal and state (and local) levels. Here’s a breakdown of what landlords in Florida should be aware of:
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1. Federal Tax Implications (IRS)
Since Florida does not have a state income tax, the federal tax rules will be your primary concern:
✅ Rental Income is Taxable
• All rental income received must be reported on your federal income tax return.
• This includes rent payments, security deposits (if not returned), lease cancellation fees, and any services provided in lieu of rent.
✅ Deductions You Can Take
You can deduct certain expenses related to the rental property, including:
• Mortgage interest
• Property taxes
• Operating expenses (repairs, maintenance, utilities if paid by landlord)
• Depreciation on the property structure (not land)
• Insurance premiums
• Management fees (if you use a property manager)
• HOA dues
• Legal and accounting fees
✅ Depreciation
• You can depreciate the property over 27.5 years (residential real estate).
• This is a significant tax benefit, reducing your taxable rental income each year.
❌ Passive Activity Rules
• Rental real estate is considered a passive activity, so losses may be limited unless:
• You are a real estate professional, or
• You actively participate and meet income thresholds (up to $25,000 in losses may be deductible if your modified adjusted gross income is under $100,000).
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2. State & Local Tax in Florida
✅ No State Income Tax
• Florida does not tax individual income, so rental income is not taxed at the state level.
❗ Sales and Use Tax on Short-Term Rentals
• If you’re renting the property for periods of less than 6 months (e.g., vacation rentals or Airbnbs), you may be required to:
• Collect and remit state sales tax (6%)
• Pay county tourist development taxes (varies by county, usually 1–5%)
• Register with the Florida Department of Revenue and possibly your local tax collector
✅ Property Taxes
• You’ll still be responsible for annual property taxes to the county.
• Homestead exemption typically doesn’t apply to rental properties (non-primary residences).
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3. Recordkeeping & Filing
• Use Schedule E (Form 1040) to report income and expenses.
• Maintain clear records of income, receipts, contracts, and any capital improvements for depreciation tracking.
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