Tax benefit of renting your home to your business 14 days in a year

Jul 15, 2023

As a business owner, you are always looking for ways to save money on taxes. One strategy that you may not have considered is renting your home to your business for up to 14 days per year. This can provide some significant tax benefits, as long as you follow the rules.

What is the 14-day rule?

The 14-day rule is a provision in the tax code that allows you to rent your home to your business for up to 14 days per year without having to report the rental income on your tax return. This means that you can receive rental income from your business without having to pay taxes on it.

What are the benefits of the 14-day rule?

The benefits of the 14-day rule are clear. By renting your home to your business for up to 14 days per year, you can:

Receive rental income tax-free
Deduct expenses related to the rental, such as cleaning and maintenance
Reduce your taxable income

Overall, this can be a great way to save money on taxes and increase your bottom line.

What are the rules for using the 14-day rule?

While the 14-day rule can provide some great tax benefits, it's important to follow the rules to avoid any problems with the IRS. Here are some of the key rules to keep in mind:

You must rent your home to your business for a fair market value price
You can only rent your home to your business for up to 14 days per year
You cannot deduct any losses from the rental activity
You must keep records of the rental income and expenses

By following these rules, you can ensure that you are using the 14-day rule correctly and avoiding any issues with the IRS.

What expenses can you deduct?

If you rent your home to your business for up to 14 days per year, you can deduct any expenses that are directly related to the rental. This can include:

Cleaning and maintenance costs
Repairs and improvements
Insurance and property taxes
Utilities and other expenses

By deducting these expenses, you can reduce your taxable income and save money on taxes.

Conclusion

The 14-day rule can be a great way to save money on taxes and increase your bottom line. By renting your home to your business for up to 14 days per year, you can receive rental income tax-free and deduct related expenses. Just be sure to follow the rules and keep good records to avoid any issues with the IRS.

So, if you're a business owner looking for ways to save money on taxes, consider using the 14-day rule to your advantage.