[jenuno01]

I just filed my taxes, I kind of waited last minute due to a problem with one of my W-2s. Anyway, I bought a house last year after I graduated. At first, I wasn’t planning on having any roommates, but a flood happened in town and 3 of my friends were affected by it. I let them live in my house for what we thought would be a 2-month period, but we decided they are going to stay for good, or until they get married. I charge them $350 in total (which is really cheap). I’ve always been bad with taxes and completely forgot about the implications of Rent Revenue. What should I do now?! I am freaking out. Should I amend my return? I know this makes me seem dumb… but I honest to God completely disregarded this income until last night while briefly studying for REG.

Class of 2012

[nextstopCPA]

If you flat out told your roomates that they would pay you rent in such and such amount, then it's rental income. If you said, just give me what you can whenver you can, then Mini may have a point about it being a gift.

If you decide to file an amended return, I would wait until after they accept your original return. If this can be done before the April 17th deadline, then you would avoid the penalties and interest that would ordinarily be tacked on. I would report the income as Not For Profit Rental Income on line 21 of 1040. You should be able to offset your income with expenses such as utilities, depreciation for property, etc so that your additional net tax liability is zero. Or you could report the rental income on Schedule E and deduct expenses beyond the income (if possible) and possibly receive a refund. Yet, there are other considerations since it's your main home.

Consult with a local tax advisor in your area if you are unclear on how to proceed. That someone will be able to sort through the details and have a better understanding of your situation.

FAR Passed
REG Passed
AUD Passed
BEC Passed

All aboard, this train's leaving. Next stop, TBD!

[nextstopCPA]

@Jenuno, I think you are getting confused with filing on time and failing to file at all. People are late all the time including CPAs but they get extensions and eventually file. You are not late since you already filed an original return. You just have to make a correction to your original return with the amended one. There is a time limit of a few years before filing late becomes failing to file.

FAR Passed
REG Passed
AUD Passed
BEC Passed

All aboard, this train's leaving. Next stop, TBD!

[Anonymous]

@mini – I do not know of any kind of “income” that can be excluded from a tax return if you are required to file a return. You may have to report non-taxable income on a return but that doesn't mean you have to pay taxes on it. Combat pay is not taxable income but you still report it on a 1040. Certain foreign earned income is not taxable but you still have to report it on a 1040. There are payments to a taxpayer that are not income. Child Support is not income and not reported on a 1040. Gifts are not income and are not reported on a 1040. This is obviously rental income and to exclude it would be a violation of the IRS code.

[porschify]

@Kricket @mini – I do not know of any kind of “income” that can be excluded from a tax return if you are required to file a return.

Not trying to start an argument here but; Workers Comp, Life insurance proceeds, 3rd party sick pay benefits that were purchased with after tax dollars, you mentioned child support already, inheritance; all items that are non taxable/excluded from a 1040.

If someone receives money, it is “income” to that person,however much like mini said the IRS defines “income” as income from any source derived except specifically excluded.

REG- 81
BEC- 72,76
AUD- 67,88
FAR- 78

Done!

[jelly]

Interesting, all of this. I believe Schedule E is for passive income.

Couldn't pass again!

[Author]

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