A majority – some 53% – of individual landlords make mistakes on their federal income tax when it comes to reporting rental income and expenses, according to a study by the U.S. Government Accountability Office. That means that out of about 8.9 million individual landlords in the country, nearly 5 million aren’t paying the correct tax. And of those 5 million, fully a quarter paid too much tax and should have had a lower tax bill, the government says.
The agency’s figures are based on a comprehensive review of landlords’ returns that have recently been audited. While the report doesn’t cover state taxes, it seems likely that Massachusetts landlords are making mistakes on their state tax forms as well. [Read more…]