Can you really deduct your rent from your taxes? My boyfriend lives in Michigan and says he did. I live in Illinois and am wandering if it's possible...
2007-02-15 04:30:24 · 17 answers · asked by Sarah S 3 in Business & Finance ➔ Taxes ➔ United States
Yes, if you're filing HEAD OF HOUSE HOLD. The IRS is nothing to take chances on, so if you have any questions, you should direct them to: WWW.IRS.GOV or OR CONTACT THEM BY CALLING:(866)583-3251.
2007-02-15 04:37:05 · answer #1 · answered by MrsE 3 · 0⤊ 11⤋
Is Rent Tax Deductible
2016-09-29 05:06:45 · answer #2 · answered by ? 4 · 0⤊ 0⤋
You can deduct it from your state taxes ONLY if that state allows it. When I lived in California, there was a place on the state form for getting a rent credit. You cannot do it on the federal form though, even if your state is one that does have a rent credit. You'll have to read your Michigan state tax form and see if it's on there.
2007-02-15 04:37:07 · answer #3 · answered by MarineMom 6 · 2⤊ 2⤋
The only way that you can deduct any portion of your rent is if you run a business out of your home. Then you can only deduct the rent for the room that is set up as an office. The figure to use, is they take the square footage of the home, then the square footage that is actually being used as an office. Figure out how much rent is per square foot, then times by the office area, that part of the rent can be deducted as a business expense. You also can claim part of your utilities for the business as well.
2007-02-15 04:37:32 · answer #4 · answered by Anonymous · 1⤊ 4⤋
No. Not on federal. Not unless you are self-employed/running a business and using part of the home for business purposes. Only then can you deduct a portion of the rent pertaining to the business use.
Some states do offer a renter's credit on their taxes but the renter's credit is only for lower incomes and is only a very small portion of what the actually rent is.
2007-02-15 10:16:46 · answer #5 · answered by Emma S 2 · 0⤊ 2⤋
No, you can't deduct rent on a Federal tax return. Some states offer tax breaks for renters. That would be on a state-by-state basis.
2007-02-15 05:30:24 · answer #6 · answered by Bostonian In MO 7 · 2⤊ 1⤋
You can deduct rent to a degree, I know that if your rent is work related then you can, but if your rent is simply the place you live then typically you can't. ( Other than advance payment rent). I know the answer is a late, but some people could still be wondering about this.
Rent
Rent is any amount you pay for the use of property you do not own. In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. If you have or will receive equity in or title to the property, the rent is not deductible.
Unreasonable rent. You cannot take a rental deduction for unreasonable rent. Ordinarily, the issue of reasonableness arises only if you and the lessor are related. Rent paid to a related person is reasonable if it is the same amount you would pay to a stranger for use of the same property. Rent is not unreasonable just because it is figured as a percentage of gross sales. For examples of related persons, see Related persons in chapter 2, Publication 544.
Rent on your home. If you rent your home and use part of it as your place of business, you may be able to deduct the rent you pay for that part. You must meet the requirements for business use of your home. For more information, see Business use of your home in chapter 1.
Rent paid in advance. Generally, rent paid in your trade or business is deductible in the year paid or accrued. If you pay rent in advance, you can deduct only the amount that applies to your use of the rented property during the tax year. You can deduct the rest of your payment only over the period to which it applies.
Example 1.
You are a calendar year taxpayer and you leased a building for 5 years beginning July 1. Your rent is $12,000 per year. You paid the first year's rent ($12,000) on June 30. You can deduct only $6,000 (6/12 × $12,000) for the rent that applies to the first year.
Example 2.
You are a calendar year taxpayer. Last January you leased property for 3 years for $6,000 a year. You paid the full $18,000 (3 × $6,000) during the first year of the lease. Each year you can deduct only $6,000, the part of the lease that applies to that year.
Canceling a lease. You generally can deduct as rent an amount you pay to cancel a business lease.
Lease or purchase. There may be instances in which you must determine whether your payments are for rent or for the purchase of the property. You must first determine whether your agreement is a lease or a conditional sales contract. Payments made under a conditional sales contract are not deductible as rent expense.
Conditional sales contract. Whether an agreement is a conditional sales contract depends on the intent of the parties. Determine intent based on the provisions of the agreement and the facts and circumstances that exist when you make the agreement. No single test, or special combination of tests, always applies. However, in general, an agreement may be considered a conditional sales contract rather than a lease if any of the following is true.
The agreement applies part of each payment toward an equity interest you will receive.
You get title to the property after you make a stated amount of required payments.
The amount you must pay to use the property for a short time is a large part of the amount you would pay to get title to the property.
You pay much more than the current fair rental value of the property.
You have an option to buy the property at a nominal price compared to the value of the property when you may exercise the option. Determine this value when you make the agreement.
You have an option to buy the property at a nominal price compared to the total amount you have to pay under the agreement.
The agreement designates part of the payments as interest, or that part is easy to recognize as interest.
2014-01-29 14:16:28 · answer #7 · answered by Anonymous · 1⤊ 0⤋
This Site Might Help You.
RE:
Taxes- can you deduct your rent?
Can you really deduct your rent from your taxes? My boyfriend lives in Michigan and says he did. I live in Illinois and am wandering if it's possible...
2015-08-05 22:58:15 · answer #8 · answered by Augusta 1 · 0⤊ 0⤋
NO Rent is not deductible on the Federal Tax Return.
It may be on the State Return, but you need to check with your State Dept of Revenue/Taxation
2007-02-15 04:37:05 · answer #9 · answered by Anonymous · 4⤊ 1⤋
Honey, if I can't deduct my mortgage payment on my Federal Income Tax Return, you certainly can't deduct your rent! LOL
2007-02-15 04:32:45 · answer #10 · answered by kja63 7 · 0⤊ 7⤋
I know when I lived in California I could but not here in Texas, so I believe it depends on where you are. And I believe it is a state deduction not a federal one. Its been about 6 years so I'm not 100% sure.
2007-02-15 04:34:08 · answer #11 · answered by mudd_grip 4 · 1⤊ 3⤋