Tax Advice

[BostonDeac]

I currently rent out one bedroom in a 2 BR that i own. I live in the other room. I know I report this on my taxes as income but any tricks out there i can use to maximize deductions?

 

[ChrisL68]

Figure out the square footage of the area you rent vs. your house size and deduct that portion of your utilities, property taxes, mortgage interest, maintenance costs, repairs.

Any costs associated with renting out your room (advertising, legal costs, etc) are deductible.

 

[BostonDeac]

it was just a friend from work, there is no lease or anything. he gives me a set figure each month and that covers everything.

 

[ChrisL68]

Then just deduct utilities, property tax, mortgage interest, maintenance and repairs based on the allocation of rental space/total house space.

 

[wfudeke]

And get a one page lease in place. Documentation is a good thing.

 

[oldeac]

Also, deductible expenses cannot exceed the rental income under this lease structure. The goal is just to have zero tax impact.