@elpez , you should discuss this "new" plan with your financial adviser--- he/she would know more details about your actual situation.
If the question is reduced to how your taxes would be impacted if you rented out all or part ( say 50% for example ) of your home, then:
(a) you still continue using standard deduction ;
(b) You file a schedule-E reporting -- gross rental income, deduct 50% of your mortgage interest & property taxes, take depreciation on 50% of depreciable basis of your prop.( Acquisition cost plus cost of all improvements over the years LESS cost of land at the time of acquisition ) , utilities etc. depends on your actual rental agreement.
(c) Note that while this may improve your cashflow situation, the depreciation ( accumulated over the rental period ) will increase your gain when the prop. is disposed off AND the depreciation caused portion of the gain is taxed as ordinary income, the rest of the gain is capital gain and taxed as such. The main residence gain exclusion gets murky here , depending on exacts facts and circumstances ( inclu. when sold and if there are any step-ups ).
(d) Also this additional income may impact taxability of your SSA distribution.
Therefore the suggestion that you discuss this with your financial adviser ( for the long term ). You can also try out as a "what-if" using desktop TurboTax using reasonable assumptions for the short-term view.
Is there more one of us can do for you ?
