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I clean at a motel and in return they give me a room to live in at a discounted price, but i still pay. Do i claim taxes still?
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Get your taxes done using TurboTax
Does the motel give you any tax form, like a 1099-Misc, 1099-B or W-2.?
If yes, then it's taxable.
If not, it's not so clear. In general you have a barter arrangement, and that is usually taxable. The amount you report as income is the fair market value of the discount. That would be the difference between the lowest rate charged to customers and what you pay.
There are two ways to report it. If you want it to count as Earned Income (wages) so you can get the Earned Income Credit (EIC), enter it as self employment (Business income). But then, you will have to pay social security tax 0n the income.
Other wise, In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Bartering income not already reported
It will go on line 21 of form 1040, as "Other Income".
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Get your taxes done using TurboTax
But the only way to be sure is run the numbers. The self employment tax (social security & medicare tax) will be approx. 14% of the amount. You need to compare that to the EIC you will get if you call it self employment (earned income). Look up your EIC amount(s) in this table: (page 30): <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p596.pdf">https://www.irs.gov/pub/irs-pdf/p596.pdf</a>
The earned income credit is first calculated (actually looked up in a table) on your earned income then it is calculated on your total income (AGI). You get the lesser of the two calculated EIC numbers.
Or you can use this tool to do trial returns: <a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1">https://turbotax.intuit.com/tax-to...>
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