There are some standard deductions for those whose main earnings come from a job. Follow these IRA withdrawal rules or pay a hefty tax penalty. The first income tax topic you should know when you buy an investment property is that rental income is taxable. The IRS uses a marginal tax rate to calculate your taxes, based on your taxable income. Compensation may impact where offers appear on our site but our editorial opinions are in no way affected by compensation. That is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.