When you provide what are classified as basic services to your tenants and you are a sole proprietor, you should use Schedule E. The IRS considers basic services to be things like a place to live, trash collection or general maintenance. Recall that Schedule E does allow you the option to report the expenses you are responsible for related to these services (like how much it costs you to get trash collected on behalf of your tenants or what their heating bills cost).

If, however, you offer more services to tenants, like housekeeping, dry cleaning, meals or maid services, you will need to report your rental income on Schedule C. This is the main difference between Schedule C and E. This is less applicable to most landlords and is more relevant to those running a hotel, boarding house, bed and breakfast or sometimes a rental like an Airbnb or VRBO.