For any business owner, here's a tip!
If you rent your home for no more than 14 days in a calendar year, none of that rental income has to be reported: there's no tax to pay!
This means that if you rent your home to your business for no more than 14 days, your business can deduct the rent paid and you don't have to report the rental income. You get a "free" tax deduction.
Here are the details:
The home you’re renting must be a residence, but doesn’t have to be your primary residence, which means vacation homes are also eligible for the exemption.
If you rent the home for more than 14 days, you’ll owe taxes on all of the rental income earned during the year.
There’s no income limit to the exemption.
The days the home is rented don’t have to be consecutive, so as long as the total days doesn’t exceed 14 for the year, the income is tax-exempt.
For your business to qualify, there has to be a legitimate business reason for the rental. Perhaps it's a week long team building workshop for some or all of your employees. Or perhaps it's a series of day long weekday working trips for your staff and your home (primary or vacation) is used as a location instead of paying for a hotel. Important to keep good records and document the reason for the rental.
As long as you play fair, it's a good deduction and all tax free.
Hope this helps. If you have questions, please let me know.
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