what are tax expenses of renting out 3 rooms in my apartment

[ohhboy]

Originally Posted by Lowexpectations

Could you just post all your related topics in one thread instead of starting 3?

more the merrier!

[ohhboy]

Originally Posted by michellesouthwell

But I was told to use schedule c because I have an active role in the business (changing bedsheets and serving breakfast)

If I write off all the furniture in one year am I likely to get audited?
I do not know how long my landlord will let me sublease to other renters.

you have insurance? you might get sued if you serve bad eggs! or flat pancakes............lol.

[Mike From NIU]

After reading all three threads you've started, I would agree with the posters who say you need to pay a professional, not use TurboTax. There is so much that you don't know about taxes and business that it is hard to figure out where to start to help you. (Please don't take this as an insult. The US Tax Code is complex, and the business rules confusing for those who have had no education or training in it.)

First, I would look at the IRS publications regarding income. For instance, Publications 334 (Individuals filing C or C-EZ), 525 (Taxable and Non-taxable Income), 529 (Miscellaneous Deductions), 535 (Business Expenses) would all help you start to understand the environment in which you are operating.

Theoretically, you could deduct the cost for bedding this year under §179. However, there are recapture provisions should the business fail or you later sell the property that you deduct. As someone else said, food that you provide is a direct expense, not something that is depreciated. Of course, you will need to be able to prove that the food that you deduct is solely for your guests and not for your personal consumption.

However, for now, start by seeing a tax professional who can help you get straightened out. Yes, it will cost you money, but that is also tax deductible! And it will help you reduce your risk in case of an audit. The landlord, on the other hand, is another issue, but we can't help you with that at all.

[ncole1]

Originally Posted by michellesouthwell

Line 18 is so small.
There are bed sheets, bed frame, mattress, pillows, tables, cups, food.
Food should be 1 year depreciated.

You only depreciate items that retain a significant re-sale value for more than one year.

Food is not like that - it is simply an expense. In a day it will mostly be turned to CO2 and water