If I rented out a room, am I able to deduct electricity, water and other bills? If so, what else can I deduct? -Anonymous
If you are collecting rent for a room or unit in your home, you can deduct any expenses you can attribute to that rental unit. That would include the utilities you’ve listed, as well as a portion of your homeowner’s interest, repairs to the house, lawyer or accountant fees related to the rental activity, advertising of the rental space, and the like.
You’ll also be able to deduct depreciation on the portion of your home rented out. It’s probably best to get some help from a tax professional so your taxes are filed correctly. You can also get more detailed information on residential rental properties from the Internal Revenue Service here.
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Tracy Coenenis an On The Money contributor, fraud investigator and forensic accountant, and is the author of Essentials of Corporate Fraud.