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Plus... Counting the Days

Offering a home — or a room in your home — for short-term rental is an increasingly popular way for homeowners to generate extra income. However, homeowners may not be aware that in most cases they have to report this extra income when they file their tax returns.

The good news is that there is an exception, known as the 14-day rule. This rule allows homeowners to earn tax-free rental income as long as they rent out their residence for no more than 14 days during the year. While homeowners won’t have to report the income on their taxes, they also will not be able to deduct their rental expenses. (Mortgage interest and property taxes are still deductible.)

Homeowners who rent out a personal residence for more than 14 days a year should keep careful records so they can divide out personal and business expenses at tax time.

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