If you charged a rent under the fair rental price or rented for less than 14 days, you would report the income under "other income" on line 21 of your Form 1040. It is not considered as a rental business. You do not need to report any rental income or related expenses on Schedule E. IRS considers this as a hobby. To enter, here are the steps (online):
- Sign in to your account, select Pick up where you left off
- 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
If you charged at the fair rental rate and your home is her or his 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.
- At the right upper corner, in the search box, type in schedule e and Enter
- Select Jump to schedule e
- Next screen, Income from Rentals or Royalty Property You Own, answer Yes
- Follow prompts
