Rental Income/Travel

[dtaylor79]

I will be traveling and working remotely during the summer, but will not be reimbursed for that travel to return home for work functions. Can I write this travel off on my taxes?

I will also be renting my home, but still living here for the majority of the year with my renters. What are the tax implications of receiving this rental income? How much can I expect this to impact my tax return?

[VincentL]

(1) From IRS publication 529 page 2:

You can no longer claim a deduction for unreimbursed employee expenses unless you fall into one of the following categories of employment, or have certain qualified educator expenses.
• Armed Forces reservists.
• Qualified performing artists.
• Fee-basis state or local government officials.
• Employees with impairment-related work expenses.

https://www.irs.gov/pub/irs-pdf/p529.pdf

(2) )See IRS publication 527 page 17:

Since you will have use of the property, you will need to allocate expenses between personal and business.

https://www.irs.gov/pub/irs-pdf/p527.pdf

The tax implications of receiving this rental income is dependent upon your specific tax situation. Again, the impact on your tax return is dependent upon your specific tax situation.

[Amorette_M]

Great questions!

If you are a W-2 employee, unreimbursed employee expenses are disallowed on your federal return through tax year 2025, so generally speaking you would not be able to write off this travel on your taxes.  If you happen to fall into one of these categories (Armed Forces reservists, Qualified performing artists, Fee-basis state or local government officials, employees with impairment-related work expenses) or are considered an eligible educator then you are an exception to this rule.  Additionally, you may live in a state where these miscellaneous itemized deductions are still reportable. 

Alabama, Arkansas, California, Hawaii, Minnesota, New York & Pennsylvania

If you are an independent contractor (filing a Schedule C business) then you would be able to claim your travel expenses in accordance with Publication 529.  Click here for instructions on entering this into TurboTax. 

You should expect to report your rental income on your tax return.  Keep detailed records of your expenses. You can get the full picture of rental income responsibilities by clicking here.  When a portion of your property is rented out and a portion is used for your personal purposes, the IRS is very detailed on what they will and won't allow under these circumstances.  You will need to allocate your expenses between personal and rental usage.  You can do this by either dividing the expense by the number of people living in the home or based on square footage of use.  If you are doing short-term rentals, these are treated differently.  Click here for information on how these differ.    Here are some tips and tricks if you are a first time renter.  

Rental income is generally considered passive income and this affects your taxes in a different way than earned income.  Passive activity gains are offset by passive activity losses.  If you have passive activity losses that exceed the amount you can use in the tax year, these may be...  The QBI deduction usually does not apply to passive income, but this article provides guidance on how your rental could qualify for this. Also don't forget that you will need to depreciate your property!  Here's how to handle your rental property depreciation.