Paying taxes on your USA property

Australian pays taxes on US property, so you will need to get a ITIN Individual tax identification number which is used for federal tax reporting purposes. (Similar to the AUS tax file number- see the post regarding how to set up an ITIN)

A very important note regarding tax is that the US and Australia have an agreement with respect to taxation. If you submitted your US tax return in the States, when you file for return here in Australia, simply include your USA tax returned, the ATO will take that into account when your tax receivable or tax payable. So you don't have to pay tax twice!

Income tax returns for individual calendar year taxpayers are due by April 15 of the next year. If April 15 falls on a Saturday, Sunday, or a legal holiday in Washington D.C. or in the state to which the return is required to be filed, the returns are due on the next business day.

There are IRS tax forms (over 800 types) that are used for tax payers and tax exempt organizations to report financial information to the US Inland Revenue Service. The most popular of this form its the form 1040 used by individuals. Example   http://www.irs.gov/pub/irs-pdf/f1040.pdf?portlet=3

The Schedule E is used to report income and expenses arising from the rental of real property, royalties, or from pass-through entities (like trusts, estates, partnerships.

This is an example of it:
http://www.irs.gov/pub/irs-pdf/f1040se.pdf
 

It is very important to keep track of all expenses related to you property such as:

• Commissions or property management fees,
• Homeowners insurance and HOA dues,
• Real estate taxes and mortgage interest 
• Advertising costs,
• Cleaning, maintenance, and repair costs,interest expenses.
• Security deposits reimbursed to the tenant.
• and various other expenses, such as utilities, landscaping, garbage, and so forth.

To do this it would be very helpful if you use a finance software or a computer spreadsheet so that you can print out the monthly report easy at the end of the year.
Something to take into account its that the IRS limits your total losses from all your rental properties to a maximum of $25,000 per year.


NOTE:
Research about the local taxes and the Federal taxes that might be different from states to states
Useful links:
http://www.irs.gov/