The Scott Boyar Tax Blog

Subscribe to Email Updates

How to Avoid Paying Income Tax on Rental Earnings

wanted to bring to your attention a rarely used strategy: you can get tax free income for renting your home!

Rent Your Home for 14 Days or Less.



You can cash in on this awesome tax exemption in 2018 by renting your house for two weeks or less. Renting your house for less than 15 days keeps you from having to pay taxes on a single cent of income you got from your short-term rental(s).

According to the IRS, "There's a special rule if you use a dwelling unit as a residence and rent it for fewer than 15 days. In this case, don't report any of the rental income and don't deduct any expenses as rental expenses."

This means, no matter how much money you make from these 14 days of renting, you don't even have to report the income to the IRS.

This is not for "rental properties."

To take advantage of this benefit, you must personally use the dwelling in question for 15 days or more over the course of the same year. This means that for tax purposes, your home is considered a personal residence so you can't deduct operating expenses or take a depreciation deduction.

What happens on day 15?

I think the kind of coolest thing about this strategy is for business owners. Once you rent out that 15th day, you'll owe taxes on ALL income you made on renting that year. Fourteen days of renting income can provide major padding in your 2018 budget, especially if there are major events in your area, like the PGA Tournament in Quail Hollow.

What about tax breaks for renting for business?

If you have a business let's say you hold a business meeting in your house or your vacation home once a month. So that would be 12 times - less than the 15 - so your business can pay you a check for renting your house for the day, take a tax deduction, and the income to you is tax-free.

Watch my #TaxTalk video:

Posted by Scott Boyar CPA


DISCLAIMER: The information at this Site has been provided by Scott Boyar, CPA, PLLC for general information purposes. It does not constitute legal, accounting, tax or other professional advice or services and is presented without any representation or warranty as to the accuracy or completeness of the information. Links to information on sites other than those operated by, or on behalf of, Scott Boyar, CPA are for your convenience only and are not an endorsement or recommendation of those sites.

While Scott Boyar, CPA has made every attempt to ensure that the information contained at this Site has been obtained from reliable sources, Scott Boyar, CPA is not responsible for any errors or omissions, or for the results obtained from the use of this information. ALL INFORMATION IN THIS SITE IS PROVIDED “AS IS”, WITH NO GUARANTEE OF COMPLETENESS, ACCURACY, TIMELINESS OR OF THE RESULTS OBTAINED FROM THE USE OF THIS INFORMATION, AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO WARRANTIES OF PERFORMANCE, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. In no event will Scott Boyar, CPA or Scott Boyar, CPA partners, agents or employees be liable to you or anyone else for any decision made or action taken in reliance on the information in this Site or for any consequential, special or similar damages, even if advised of the possibility of such damages.