“I am a Dutch citizen living in the US on an H-1B visa, and I own a rental property in the Netherlands. What are the most affordable ways to file my US tax return to report my foreign rental income on Schedule E, and is it better to use software, a regular US CPA, or split the US and Dutch returns between separate preparers?”
One directly owned Dutch rental is manageable, but the first U.S. return must establish the correct tax residency, property basis, depreciation and treatment of Dutch tax. Once those are correct, you will have a property schedule that can be reused in later years.
Your best route depends on U.S. tax residency, direct versus entity ownership, and whether you need Form 1116 for Dutch tax.
This is the lowest published-price candidate if you are a full-year resident, own one property directly, have no mixed personal use or prior-year corrections, and can validate the completed forms. OLT advertises a $0 federal return, a $9.95 state return and rental-property support; it separately explains how to add Form 1116 [S16–S17]. Before transmitting, confirm that the PDF contains Schedule E, the correct depreciation and—if claimed—Form 1116 in the appropriate income category. IRS Free File is another $0 federal route if your 2025 adjusted gross income is $89,000 or less, although each partner has its own supported-form limits [S13].
This is usually the best balance for a first filing: prepare the Dutch return yourself through Mijn Belastingdienst or use a Dutch preparer, then give the Dutch assessment and property records to a U.S. or CPA who routinely handles foreign rentals, Form 1116, FBAR and Form 8938. Dutch authorities state that Dutch real estate remains taxable in the Netherlands and that a rented property is reported in [S12].
A generic CPA is not automatically the right specialist. The IRS confirms that both CPAs and EAs have unlimited representation rights, so choose by demonstrated foreign-rental, foreign-credit and international-information-return experience—not the CPA title alone [S11].
Use this route when you are dual-status, own through a Dutch entity, sold or transferred the property, have uncorrected prior depreciation, or face a disputed Dutch-credit issue. One coordinated firm can handle the interaction between the returns, but no authoritative source establishes that it is the most affordable route.
For a first U.S. year, paying for a correct basis, land allocation and depreciation schedule can create a template that you reuse later.
These steps establish the correct return type first, then produce the property and foreign-account forms that apply to you.
Before choosing software
Determine your U.S. tax-residency branch
Count your H-1B physical-presence days under the . If you were a full-year resident, use Form 1040 and report the Dutch rental; if you were a nonresident at year-end, Form 1040-NR generally reports U.S.-source and effectively connected income rather than an ordinary foreign rental; if you were dual-status, use the special dual-status filing route and professional preparation [S1].
Requisitos
Before preparing either return
Build the Dutch property packet
Keep the original euro records and convert reportable U.S. amounts using the exchange rate prevailing when each income or expense item was received, paid or accrued [S5]. Identify land separately because land is not depreciated.
Requisitos
Before engaging a preparer
Choose and price the U.S. filing scope
For the split route, request one fixed scope covering Form 1040, Schedule E, the depreciation calculation and Form 4562 if required, Form 1116 if supportable, FBAR, Form 8938 and the state return if applicable. Choose an EA or CPA who regularly prepares those forms; both credentials have unlimited IRS representation rights [S11].
Requisitos
After residency and basis are settled
Prepare the U.S. rental schedules
Enter the property on Schedule E and use depreciation—generally 30 years if placed in service after 2017 or 40 years if earlier [S2–S4]. Claim Dutch tax on Form 1116 only if the charge meets all four IRS creditability tests; rents are ordinarily in the passive category, subject to the Form 1116 exceptions [S6–S7].
Requisitos
Using the same property records
Complete the Dutch filing separately
Report the Dutch rented property under the applicable rules. The Belastingdienst states that Dutch real estate remains taxable in the Netherlands when you live abroad [S12].
Requisitos
For a 2025 return
File the return and foreign-account report
If you timely requested Form 4868, transmit the federal return by October 15, 2026; any unpaid federal tax was still due April 15. If you did not timely request the extension, file now. If your foreign accounts exceeded $10,000 in aggregate at any time, e-file FinCEN Form 114 separately by the automatic October 15 deadline [S8–S10].
Requisitos
You are not the first to go through this. Here is how it went for others who asked the same thing.
u/Ok_Educator441r/h1b8 abr 2026
This answer relies on IRS forms and publications, FinCEN reporting rules, Dutch Belastingdienst guidance and the filing providers’ own published support pages.
IRS H-1B Taxation Guidance
H-1B days normally count for tax residency, and a full-year resident reports worldwide income.
Unless some other exception applies, an H-1B alien must count every day of physical presence in the U.S. for purposes of the Substantial Presence Test. H-1B aliens who are U.S. resident aliens for the entire taxable year must report their entire worldwide income on Form 1040, U.S. Individual Income Tax Return, in the same manner as if they were U.S. citizens. H-1B aliens who are nonresident aliens on the last day of the taxable year generally must report their U.S.-source fixed, determinable, annual, or periodical (FDAP) income (e.g., compensation earned from working in the U.S.) and income effectively connected with a U.S. trade or business (ECI) on Form 1040-NR, U.S. Nonresident Alien Income Tax Return. H-1B aliens who are “dual-status aliens” must file a special income tax return.
IRS Publication 527 (2025)
Residential rental activity is reported on Schedule E with income, expenses and depreciation.
Residential Rental Property
The basic form for reporting residential rental income and expenses is Schedule E (Form 1040). List your total income, expenses, and depreciation for each rental property.
IRS Publication 946 (2025)
Tangible property used predominantly abroad must use the alternative depreciation system.
Property Required To Be Depreciated Under ADS
Any tangible property used predominantly outside the United States during the tax year.
IRS Publication 946 (2025)
ADS gives foreign residential rental property a 30-year period, or 40 years for property placed in service before 2018.
Table 4-1
Residential rental property |30 years ¹ | ¹ 40 years for property placed in service before January 1, 2018.
IRS Foreign Currency Guidance
Foreign-currency amounts must be converted to U.S. dollars using the prevailing rate when received, paid or accrued.
You must express the amounts you report on your U.S. tax return in U.S. dollars. If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U.S. dollars. How you do this depends on your functional currency. Your functional currency generally is the U.S. dollar unless you are required to use the currency of a foreign country. Make all income tax determinations in your functional currency. If your functional currency is the U.S. dollar, you must immediately translate into dollars all items of income, expense, etc. (including taxes), that you receive, pay, or accrue in a foreign currency and that will affect computation of your income tax. Use the exchange rate prevailing when you receive, pay, or accrue the item.
IRS Publication 514 (2025)
A Dutch charge is creditable only if it meets all four IRS tests.
Four Tests
To qualify for the credit, you must meet all four of the following requirements. The tax must be imposed on you. You must have paid or accrued the tax. The tax must be the legal and actual foreign tax liability. The tax must be an income tax (or a tax in lieu of an income tax).
Instructions for Form 1116 (2025)
Rents ordinarily fall in the passive-income category on Form 1116, subject to the form’s exceptions.
Passive Category Income
Passive income generally includes dividends, interest, royalties, rents, annuities, excess of gains over losses from the sale of property that produces such income or of non-income-producing investment property, and excess of gains over losses from foreign currency or commodities transactions.
IRS Form 4868 Extension Guidance
A timely extension moves the 2025 return filing date to October 15, but not the payment date.
If you can’t file your federal tax return by April 15, 2026, request an extension by April 15, 2026, to get an automatic 6-month extension. An extension gives you until October 15, 2026, to file your return. An extension of time to file your return does not grant you any extension of time to pay your taxes.
FinCEN Form 114 / IRS FBAR Comparison
The FBAR threshold is based on the combined highest value of foreign accounts and has an automatic October extension.
A U.S. person, including a citizen, resident, corporation, partnership, limited liability company, trust and estate, must file an FBAR to report: a financial interest in or signature or other authority over at least one financial account located outside the United States if the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported. You’re allowed an automatic extension to October 15 if you fail to meet the FBAR annual due date of April 15.
IRS Form 8938 and FBAR Comparison
Directly held real estate is excluded from both forms, while a foreign financial account can be reportable.
Types of Foreign Assets
Foreign real estate held directly |No |No | Financial (deposit and custodial) accounts held at foreign financial institutions |Yes |Yes |
IRS Preparer Credentials Guidance
Both EAs and CPAs can represent taxpayers fully before the IRS.
Unlimited representation rights: Enrolled agents, certified public accountants, and attorneys have unlimited representation rights before the IRS.
Belastingdienst Foreign Taxpayer Guidance
The Netherlands taxes Dutch real estate and treats a rented Dutch property as a Box 3 asset for a person living abroad.
Onroerende zaken in Nederland zijn altijd in Nederland belast. U moet de volgende bezittingen in box 3 aangeven: onroerend goed in Nederland. U hebt bijvoorbeeld een vakantiewoning of een verhuurd pand in Nederland.
IRS Free File (2026 Filing Season)
IRS Free File provides guided federal software below the published AGI ceiling, subject to partner eligibility.
If your adjusted gross income (AGI) was $89,000 or less, review each trusted partner's offer to make sure you qualify for your desired product. Some products may have state filing fees. Any IRS Free File option you choose will provide the following: Guided Tax Software provides free online tax preparation and filing at an IRS partner site.
IRS Publication 4012, VITA/TCE Guide
Ordinary rental returns are outside the free VITA/TCE scope except for the narrow active-duty military rule.
Schedule E
Home rental income is in scope only if preparer and quality reviewer have Military Certification and the taxpayer is active duty military. The following are Out of Scope: • Rental income other than as above
FreeTaxUSA 2025 Supported Forms
FreeTaxUSA supports Schedule E but limits its Form 1116 implementation to interest and dividends.
Rental real estate income (Schedule E) Foreign Tax Credit (Form 1116)* * For interest and dividend income only
OLT 2025 Pricing and Forms
OLT publishes a low-cost federal/state price and lists rental-property income support.
File federal for $0. State is only $9.95. Rental Property Income
OLT Form 1116 Software Guidance
OLT separately documents a software workflow for adding Form 1116.
Software can guide you through how to add Form 1116 while filing your tax return using our Software.
Instructions for Form 5471 (12/2025)
Becoming a U.S. person while holding a qualifying foreign-corporation interest can trigger Form 5471.
Category 3 Filer; When and Where To File
A person who becomes a U.S. person while meeting the 10% stock ownership requirement with respect to the foreign corporation; or Attach Form 5471 to your income tax return (or, if applicable, partnership or exempt organization return) and file both by the due date (including extensions) for that return.
These are the official rules and provider terms as published on the cited dates; tax rules, thresholds, prices and software support can change.
This is general information about official processes, not legal advice, and SettleKit is not a law firm.
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