How do i get away from paying taxes on roommates. I am thinking of getting roommates. They are just helping me pay my mortgage . what do i put on the agreement if dont have to pay taxes
2006-07-14 06:08:41 · 7 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Why shouldn't you have to pay taxes like everyone else?!
2006-07-14 06:12:27 · answer #1 · answered by Kitty? 6 · 0⤊ 0⤋
There is no 'getting away', as you put it. And it is not like you are going to be incurring any additional expenses from a tax standpoint if you have roommates. Think of it this way - say your mortgage is 5000 per month. You decide to get 4 roommates and each of you will now pay 1000 per month. When tax time rolls around, you are going to deduct the FULL amount of the mortgage interest and property taxes, even though you didnt pay for it all completely. Because of that, you will then have to claim the total payments that you received from your roommates as rental income - so in essence it is a wash for the most part. In fact, you might even be able to deduct additional expenses that you incurred in order to maintain the rooms that you rented out...for example, say one of the rented rooms/bathrooms requires some fixing up, painting, repairs, etc - you would be able to deduct those amounts as rental costs. So if anything, you come out ahead at the end of the day. Keep in mind that there are certain rules regarding the deductibility of rental losses as they are limited to a certain degree, without going into too much detail.
Hope this helps.
2006-07-15 16:30:10 · answer #2 · answered by G-man 2 · 1⤊ 0⤋
You don't pay taxes on roommates. The IRS has ruled that unless you are operating a rooming house, taking in roommates is simply an expense sharing operation. There are no tax consequences either way. You receive no taxable income, and cannot deduct any expenses related to having roommates.
2006-07-14 13:46:23 · answer #3 · answered by Bostonian In MO 7 · 2⤊ 0⤋
Hmm check with your local state laws on room and board, and tenancy laws...not all states require taxes on room mates...but you can have to pay for apartments or if the rental is proven to be income...some states have it so that if its under the mortgage amount (the total you collect) that its not considered income...And there are discrepancies like making the leases for under a year, like as if yo9u are just helping out a relative...You can find info under your state name plus a ".gov" or a ".org"...Then you look under housing law.
Oh I almost forgot...income against a loan isn't taxable (careful how you word it...double check with tax attorney like H&R block).
But if you take a loan for a buisness any income made during that loan is sapposed to be a wright off...A morgage is a loan...But like i said the laws can vary state to state and even in wording.
2006-07-14 13:17:10 · answer #4 · answered by micki_g 4 · 0⤊ 0⤋
Who doesn't have to pay taxes? I thought there were two guarantee's in life - Death & Taxes. who and how do you get away without the latter?
2006-07-14 13:12:48 · answer #5 · answered by Jay 3 · 0⤊ 0⤋
I don't know, but don't take them shopping with you when they're broke. Then when they ask to borrow, you may be paying their sales tax.
2006-07-14 13:13:33 · answer #6 · answered by aanstalokaniskiodov_nikolai 5 · 0⤊ 0⤋
hmm taxes
2006-07-14 13:13:56 · answer #7 · answered by hello 2 · 0⤊ 0⤋