If you are charging at the fair rental rate and your home is the tenant's main home, it is considered as a rental transaction for business. You are required to report the rental income and allowed to deduct related rental expenses on Schedule E. Here are the steps (online):
- After sign in to your account, select Take me to my return
- At the right upper corner, in the search box, type in schedule e then Enter
- Select Jump to schedule e and follow the prompts
If you rent it for less than 14 days or you are charging rent at below fair rental price, it is not considered as a rental property for business. Instead, it is treated as a personal-use property. You would report income as other income on line 21 on Schedule 1 of your Form 1040. Due to the new tax law, no expenses are allowed for deduction.
- To the right upper corner, in the search box, type in "other
reportable income" and Enter
- Select Jump to other reportable income
- Next screen, Other Wages Received, select No to
continue
- Next screen, scroll down all the way to the bottom, under Other
reportable income, select Start
- Next screen, Any Other Taxable Income? select Yes to
continue
