I did not include enough rental income for 2024 Does the IRS usually look at 2024 if they have already accepted that return. My tenant paid Jan 2024 rent on Dec 31 2023. How much is the penalty and interest
Did you include the rent in question on the 2023 return?
Late payment penalty is .5% per month + 7% interest.
Pacobuck on
Yes but the bank statement shows on Jan 2024 statement. Do I need to also include all bank statements. I also didn’t include enough for 2023 but too much for 2022 He was paying with Zelle. If I only file one 1040x will they then check 2023 and 2022. I am thinking about not doing anything. Does a CPA just run this through their software
Pacobuck on
If I owe $5000 is that 7.5% of $5000 approximately $400
Pacobuck on
For $5000 is that approximately $400
Manonajourney76 on
You report the rent income when you receive it. So the rent received 12/31/2023 should be reported in 2023.
So – it sounds like 2024 is correct as filed and does not need to be changed?
You may have reasons to amend 2022 to reduce the income reported and amend 2023 to increase the income reported – I would do that if the amount of the monthly rent is very large.
>Does the IRS usually look at 2024 if they have already accepted that return
The IRS may audit filed return for a 3 year window after it is filed. That (audit) is where they may ask to look at bank records to help confirm that the gross rents were correctly reported on the tax return. The general likelihood of being selected for an audit (for 1040 tax returns) in less than 1%.
5 Comments
Rental income is reported on Schedule E.
Did you include the rent in question on the 2023 return?
Late payment penalty is .5% per month + 7% interest.
Yes but the bank statement shows on Jan 2024 statement. Do I need to also include all bank statements. I also didn’t include enough for 2023 but too much for 2022 He was paying with Zelle. If I only file one 1040x will they then check 2023 and 2022. I am thinking about not doing anything. Does a CPA just run this through their software
If I owe $5000 is that 7.5% of $5000 approximately $400
For $5000 is that approximately $400
You report the rent income when you receive it. So the rent received 12/31/2023 should be reported in 2023.
So – it sounds like 2024 is correct as filed and does not need to be changed?
You may have reasons to amend 2022 to reduce the income reported and amend 2023 to increase the income reported – I would do that if the amount of the monthly rent is very large.
>Does the IRS usually look at 2024 if they have already accepted that return
The IRS may audit filed return for a 3 year window after it is filed. That (audit) is where they may ask to look at bank records to help confirm that the gross rents were correctly reported on the tax return. The general likelihood of being selected for an audit (for 1040 tax returns) in less than 1%.