I thought about renting out the extra room in my house

[CountAllVotes]

Things have doubled to tripled in price. I'm down to one cat now and the room my late husband was in is empty.

I considered renting it out and found out that this is taxable income if I do this.

Any tips or ideas on doing this?

I have some money left in the bank but I don't know how long it will last given the way prices continue to escalate on everything.

Thanks for any input re: this.

CountAllVotes

[xmas74]

1. What if it's worded more like a roommate

And less like a landlord situation?

Advertise for a roommate to split costs. Roommates aren't usually taxed.

[CountAllVotes]

3. thanks for this

The PG&E energy efficient team was here a few weeks ago.

The man wanted my SSA slip and the pension slip from my old job.

Between the two things it was a shameful amount of money but he had no idea why the amounts are so low.

It really was none of his business but he pointed to my SSA slip and said to me, "I bet you worked for years for this! You should rent out that empty room you have here!".

I didn't say a word but the word ROOMMATE never came up.

Thank you!

[xmas74]

5. Advertise for a roommates

To split utilities and chores. When interviewing them you can find out what they want out of it, in case there are other services. (Groceries are an excellent example. Are you shopping and dining separately or will you join shop and share meals?)

[Big Blue Marble]

30. That is being deceptive.

And you are not a tax expert. If you are being paid for rent you have to report it no matter how you describe it.

[xmas74]

32. It's not deceptive if

Instead of charging rent she's gaining assistance with utilities and other things. That way she's not profiting yet she's still getting the help she needs. And it's not deceitful or dishonest.
Maybe instead of renting out a room another situation would better suit. She should look into her municipality laws about roommates and follow them.

I see many more room lets and more ads for roommates in our future.

[Big Blue Marble]

37. Actually it is.

I have prepared taxes for over 30 years and know all the workarounds etc. Money exchanged in this case
is a taxable event even if it is bartered. Given her low income bracket and her ability to charge expenses
against the rent income. The taxes she would owe are minimal and she would be far ahead of not
having the income while being above board and legal.

[William769]

40. You want to talk about deception? Look at our Government right now.

[Big Blue Marble]

45. Yes but that has nothing to do with this situation or reporting your taxes.

I would recommend that Democrats report their taxes very accurately at this time
as self-protection.

[Hekate]

69. Also it *might* be easier to get rid of a roommate than a tenant. Proceed carefully...

…protect your personal space, privacy, and possessions. Others will have more comprehensive ideas.

It’s very common in Santa Barbara where I used to live, and has been for decades, due to high cost of housing and chronic housing shortage.

Best of luck.

[Shermann]

2. My parents tried that for a while

The trouble with that arrangement is that it is very temporary. Unless you can find a renter who wants to stay put for a while, you will likely have a revolving door with somebody new in there every six months. So, there's the periodic hassle of all that, and eventually you will get somebody in there who is creating some sort of a problem.

[CountAllVotes]

4. I'd prefer to live alone

I never did well with roommate in college.

I tried renting out a portion of my apartment in San Francisco many years ago.

The person was giving me $125 a month and left and I had a huge phone bill on my hands, I remember that much. I never did that again as yes, it was a revolving door situation no doubt.

Maybe if it was someone you knew already it would work --- ??

[Mariana]

17. I would prefer to live alone, too

but if taking in a lodger is needed to keep the lights on and food on the table ...

[totodeinhere]

6. I was living alone in a four bedroom house.

Then my friend who is around my age moved in. Then his grandson moved in. Then I let a friend who needed a place to stay move into the fourth bedroom. So I went from living alone to having three roommates including a 13 year old boy. It is quite a change. I have less privacy but having roommates to share expenses is nice.

[CountAllVotes]

7. I'm sort of a loner

I was the only girl in the family with two brothers, one died at the age of 44 years.

The other on is a MAGA and I rarely hear from him and he certainly does no offer any help.

The house is on a 6K lot but the house itself is about the size of a 2-bedroom apt.

The water bill was $35.00 when I moved in here; now $80+. Garbage bill was $35 too and now $120.00 every six weeks. PG&E bill has tripled. Homeowner's insurance has easily doubled. The are many other things too but my god, I'm not cutting it!

I have to hire someone to cut the lawn here as I simply cannot do it as I am totally disabled and could easily fall outside. Doctor's orders that I have a person doing this around here!

I don't know how long what I have left in an old IRA will last, but certainly not for a long period of time.

All I can do is hope I don't live too long. What a hell huh?

[NJCher]

8. any colleges or universities around there?

Around here, students are always looking for housing, and even if it's a drive, there is so much competition for a rental that they'll do it.

They have an office of student housing you could list with, I'll bet.

[CountAllVotes]

10. Yes, two of them

n/t

[xmas74]

16. Look for an older student

They might fit what you need

[CountAllVotes]

19. That is a good idea

When I was college age, I'll admit it, I was a force to contend with.

I wouldn't have wanted me as a roommate that is for sure!

Thank you!

[xmas74]

24. There are plenty of nontraditional students

Women who've raised their children and finally returned, students working on graduate studies, etc.

[totodeinhere]

11. Many communities have a local agency on aging which might be able to provide

help to seniors and the disabled with household chores such as lawn mowing. You might want to check into that if you haven't. There also are programs to assist with utility bills.

[CountAllVotes]

13. I get help with the utility bill

My help for the year expired. Last month the bill was huge!

I turned the heat off and it was 52 degrees in here this a.m. That is too cold for me an my Missy cat!

*sigh*

This is such an unexpected situation to be in.

I am in touch with the Area One Agency for senior citizens. They were trying to find me someone to drive me to the dentist. That never quite occurred so I'm still hanging to a car with huge payments on it.

I won't last too long.

No free help, I see that. I went to the local welfare office and they told me to forget about the yard as it isn't an issue being I am not living in a place where you are required to keep the yard up; a homeowner's assn. it is called.

That may sound ok but ... I'm sure the neighbors around here won't much care for it and things start growing like crazy very soon.

[NJCher]

18. you could build that into the rent

meaning take a certain amount off the rent if the person mows the lawn.

[totodeinhere]

20. You and millions more Americans are struggling with those same issues.

And Trump will be no help. He would rather concentrate his energy of non issues such as renaming the Gulf of Mexico. I just hope and pray that we can somehow make it through these next four years.

[CountAllVotes]

21. Frankly, I hope I don't live very much longer

I'm live in chronic pain from the MS.

Life is already a struggle and now this nightmare.

I could move but I don't know where to go.

The house is worth maybe $300K or more.

Just the thought of moving stresses me out as I have nowhere to go.

[hamsterjill]

49. There was a time when I would have thought your comment was absolute craziness.

But now, as I've aged, I can totally understand your sentiment. There is just way too much suffering - not only to endure ones' self, but to witness happening to others and other living creatures.

No one is suggesting doing anything here. Let's be clear about that. Just commenting that I can understand where you are coming from.

[CountAllVotes]

50. thanks

Yes, my health has gone to hell.

I developed systemic neuopathy after my husband died.

I have to sleep with one foot elevated as the pain is severe.

Hands and feet are numb. Difficult to type, walk etc.

It isn't getting any better and the stress is literally killing me.

How long can I go on like this??

[spooky3]

57. Here is a good organization that is doing advocacy:

https://compassionandchoices.org/

[Native]

38. I don't know how much your car loan payments and car insurance are running you each month, not to mention gas &

maintenance, but if you only travel a few times a week, you might find huge savings by simply using a ride share company like Uber or Lyft. It's amazing how cost effective that becomes when you are no longer having to commute to work.

[CountAllVotes]

39. the car is cost me abt. $500 a month

I had no idea it was in the two head-on collisions; not disclosed to me.

There are pictures of it all wrecked on the internet in fact!

That said, I don't know how it will end up.

If a walk away from the loan, I'll be screwed. No one will rent to me, etc.

[wordstroken]

64. Can you put an ad on Craigslist to sell your car?

That’s what my rural neighbor did when she was rock bottom. She said it was easy to do online. That it was practically free to list it. And that she sold the car for a profit in just a few weeks.
Hugs that we all get through this somehow.

[CountAllVotes]

65. The car has a lien on it still

I owe $19K on it still!

[mucholderthandirt]

67. If you could get enough to just pay it off, it could be worth it.

No monthly payment, no insurance bill, surely would save you money for other expenses. And if it's available, one of the ride services. Can you get grocery delivery? I got Walmart+ because it was killing me to walk all over the store (or even any regular grocery store), and it became available to my area.

We have a bus service for the disabled and elderly here, and a lot of the service area is rural. I believe there's no cost for those qualified.

Maybe sell the house, find a small townhouse or condo, where there's no outside work, or the site manages it. Some include repairs, but there's probably something like an HOA fee for that. Still, might end up cheaper.

I know things seem hopeless, but there are probably still solutions out there. It helps to get other people to think of things to try, too.

[Abolishinist]

9. Do more than just a hand-shake agreement, be sure to have a lease document prepared.

There are horror stories out there about tenants not leaving and even squatters taking over someone's house.

[CountAllVotes]

12. They do have a homeless problem here

It isn't as bad as San Francisco luckily, but there is a problem.

That's is the last thing I need, a problem like you describe.

[milestogo]

23. Don't take in someone who is desperate.

[CountAllVotes]

52. A homeless man that is desperate has been after me

He is living in his car and had a pitbull with him up until recently.

I tend to avoid him as much as I can, believe me.

NO THANKS!

He is doing what the man in the video said. Stating he could fix all of these things, etc.

Luckily, I am pretty good at fixing things myself and I have a "fix-it" person for most needs that come up.

Being the house is so small, nothing major has ever come up that needs to me fixed as Mr CAV was a skilled carpenter/groundskeeper before he fell ill.

[milestogo]

55. Sadly, its dangerous.

[spooky3]

14. 1) you can take expenses (including a part of depreciation, taxes, repairs, utilities, etc.)

Against rental income. The IRS has an easy to understand publication on rental income and expenses.

2) if your net total income is low, you may not owe income taxes.

[CountAllVotes]

15. I pay taxes every year

About $800 a year I pay since Mr. CAV died.

After he died, I lost his income and the prices on everything has gone way up.

What money I have left is in tax-deferred investments, like and IRA.

So, yep, they got me!

[spooky3]

25. Then the taxes on the net rental income

Would be pretty low in your marginal bracket.

Let’s say you take in $500 per month in gross rental income. The allowable expenses against it might be $400–maybe even more, with depreciation. You would pay income tax on only $1200 per year over the income you already pay tax on. If your marginal rate is 20%, you would owe only $240 more in tax on $6000 of gross income. Your expenses would go up a bit but depreciation doesn't cost you, and insurance and most other expenses you would have anyway. If you rent it you would have a lease that would potentially give you more protection than if you had a roommate.

But there are risks either way, with a jerk for a roommate or tenant, as you’ve said. Would it make sense to consider selling and downsizing?

[CountAllVotes]

31. Many are selling their houses and moving into RVs here

One person I know sold the house and is living in an RV now.

It is very small for four people.

She said she like is just fine.

That said, she was pretty upset when the old dog she has pissed on the laminated flooring in the RV. The only way to fix that is to rip it up and replace it before the mold, etc. sets in.

I've thought about moving into a mobile home park but I'm not sure how great of an idea that would be.

My property taxes are only about $125 a month as I am under Prop. 13 in California. Taxes can only go up a small amount and the property taxes in have with AAA are inflation protected costing may $70 a month at the most.

They thing that is killing me is the car and all of the other things I've mentioned.

The car is in the midst of a lawsuit as it was in two head-on collisions that were not disclosed to me when I bought it. No one will buy it from me given this fact. It is set to go through arbitration in Sept. 2025. I do not know what the outcome will be but I have to bite the bullet on the car situation until this is resolved.

I could return the car to the bank as they knew the place that sold me the car were frauds. I'll take a hell of a hit on my credit however. At present I have a FICO score of 820. It would drop perhaps as much as 200 pts. if I return the car to the bank.

Sickening isn't it?

[MLAA]

33. If you don't need to drive much, would you be better off without the car, gas and insurance expenses and instead

using Uber, Lyft or a cab for occasional trips and have groceries delivered a couple times a month? Maybe you could do the math and see how it comes out.

[CountAllVotes]

35. I can walk away from the car

But as I mention, I'll take a hell of a hit of my credit.

I can't really do anything about the car until after October.

Such a nightmare this is!

[Native]

41. if you aren't planning on buying a new home or anything major on credit, who cares if your credit takes a hit....even

people who file bankruptcy qualify for credit cards in as little as a year. And, you can always attach an explanation about the car to your credit card file. You would need to be concerned about your credit rating if you decide to sell your home and move to an apartment - leasing an apartment requires a credit check. But that doesn't sound like something you would need to worry about anytime soon.

[CountAllVotes]

46. My bank back east recommended

I surrender the car.
I sent you a message just now.

Thank you so much!

[spooky3]

36. Yes, it is. I'm sorry you're dealing with this. Nt

[Big Blue Marble]

34. Your tax bracket would seem to be low.

And you will be able to write off utilities, home expenses and even depreciation on your house.
The net amount of taxable income would be much less than the income you receive. And the taxes
would likely fall in the 12% bracket. You will still be financially ahead with a renter. Just put
a small portion of the rent in savings each month to cover the taxes in April.

If you can find a compatible roommate, I think you should go for it to ease your financial stress/

[Niagara]

22. It might be something to consider

My best advice is to contact an attorney and get a basic rundown on what is legal for your area and protection for yourself. For instance, you'll want to find out how to protect yourself and your property if someone decided to be a squatter and not leave before you rent out a room. I'm not saying that every roommate would do this but we've all read horror stories about how this sometimes happens.



Here's an attorney that brings up some valid issues such as rental applications, rental agreements, security deposits, month to month lease terms and house rules.

There might be a situation where you become a beacon of light and hope where you unknowingly become a renters rescuer and the very same renter came to your rescue (financially) during this roommate agreement. You might make a lifelong friend.

Anything is possible in this life.

[Doodley]

26. I wanted to rent out our upstairs that we rarely use. I wanted a single female renter under 30.

For some reason my wife said no.

[cbabe]

27. Also consider people who travel a lot for work. They

may need a place for a week or two between jobs.

Or people traveling to work in your area for a month or two.

You could sidestep all the scary tenant issues and also have some alone time.

I’m thinking traveling nurses, doctors who work as vacation relief for other doctors, etc.

A friend used to rent a room to airplane pilots who wanted a nice place to stay overnight.

[FirstLight]

29. I think you can sign up on places for this...and it could be safer?

An online platform like air bnb except for travelers (I know they exist, cant think of any names). They woulld no doubt do the background checks and maybe even pay through the company, so you'd get more?

But I guess that could cause tax issues too

[cbabe]

42. You could start with the sign up agency. You could

then go ‘private’ and word of mouth once you’ve established a reputation.

Ask your librarian for help finding suitable agencies.

Airbnb is a bad idea. Owner is a major magat. And many locales restrict Airbnb. You don’t want legal hassles.

A neighbor tried Airbnb and was outed by other neighbors.

She switched to foreign students through a local college and did great.

[FirstLight]

48. oh yeah...Air BNB is awful...but I was thinking there's those kinds of agencies for business or college folks...

I remember running into a few when I was looking to relocate to Phoenix for school...

[sorcrow]

66. Try Furnished Finders

I used it as a travel nurse to find places.

The advantages
3 months at a time rental with someone who is working and making decent money.
You can usually rent at the top of the range.
Travel nurses often extend their contracts so you might end up with a renter for six months or more.

Good luck,
Sorghum Crow

[Native]

44. the need for that is dwindling. there are now sites like furnishedfinder.com that cater to professionals in this

situation. you can easily find short-term rentals now.

[FirstLight]

28. I've had not good experiences or luck...but then again, I didn't screen well or have good baundaries.

Boundaries and clear rules are needed in these situations. Maybe you can even find someone who you'd like to call "friend"...just be careful.

I've had bad luck with letting people crash with me or offering help, only to regret it in spades later. But I am a pushover and do MUCH better alone. I'm literally figuring out how to not be such a wuss in my 50s

[malaise]

43. Be very careful when choosing the tenant

Some of these arrangements work out well, but I know folks who have had horrific experiences. Choose wisely - get help from close friends or family in selecting the tenant. A young college student is often better than a middle aged person with set ways.
Put every detail of the arrangements in the contract.
Good luck. That is all.

[dempls]

47. Traveling nurses and doctors

If you have a hospital close by you might ask if they have travelers on staff that need lodging.

[CANADIANBEAVER69]

51. after watching worst roommate ever on Netflix... I nixed this idea.

It scared me what people have done to others in that situation.

[CountAllVotes]

54. I've heard some shocking stories too

I think the best thing I can do is dump the damned car and get rid of this idiot lawyer I have.

He collecting over $1K a month out of the legal ins. I have. He wants to drag it out.

If I return the car to the bank, as another poster said, what difference does it make, esp. at my age.

I have credit cards, etc. if I need them.

I just need to get rid of the car and stay here in MY HOUSE and to hell with it.

I lost two of my cats in the past year. I may reward myself my adopting one that needs a home from the nearby shelter as Missy cat is so lonely now it isn't funny.

[SheltieLover]

53. Do you have a university nearby?

If so, have them put the word out for female students.

Usually quiet & woukd be a nice source of income for you, plus help with utilities, cooking, etc.

No clue about taxes.

[CountAllVotes]

56. Thank you to all that replied

I have plenty of ideas/answers here.

The obvious answer is to ditch the car.

I don't drive much anyway and I can still get around other ways that I have recently discovered.

Thank you everyone.

[Jacson6]

58. Do you have a nearby college or university?

You can rent to the student and have a parent be the guarantor for the lease payments so you won't get burned. You can put an ad at a school to ask for a student. Since it is simply a room with one tenant you can just elect to have a young woman. The nice thing about University students is they want to go back home.

When I went to college 40 years ago I rented out rooms. All of the LL's I rented from had no alcohol/drugs rules.

[peggysue2]

59. My parents tried renting out the 2nd floor of their house

It lasted exactly three years because my father found every renter (3) objectionable. Too loud, too heavy on their feet, smoked (although my mother smoked like a chimney) and sneaking friends onto the premises (strictly prohibited particularly for the female renters).

My dad become really irritated when I quipped that maybe he wasn't suited to being a landlord, that maybe Chief of a Detention Center might work.

LOL

He was not happy with the circumstances. Or me.

[mahina]

60. sending you a DM but search for a Homesharing organization in your state. They exist in Pennsylvania, Oregon, many

other states. In our area there is an organization that screens all applicants, does background checks and matches up similar likes and needs, usually intergenerational. Here are some orgs on the continent that are into this. Also check out generations united.
https://www.cohousing.org/multigenerational-cohousing/
https://www.jchs.harvard.edu/blog/blueprint-intergenerational-living
there are many orgs to learn from.


Best practices include

adding a mini fridge or fridge in the roomie's space
adding cable access in their space if you have it
because two of the most common subjects of conflict are use of the fridge space and what is on tv.

If there is an organization serving your area that helps with mediation, look into that, and put in your agreement that disputes if any will go to mediation before legal action. That is imperfect language but you get me.

Find out how to get background checks including criminal background checks along with financial checks. In our area they cost about $30 or did the last time I used one though that was several years ago.

If there is no organization to help you navigate this, at least find a friend or two who will be on site when candidates come.

Think about
smoking
quiet times
help you will need and how you could schedule that in a considerate way
guns, yes or no
visitors including sleepovers, yes no or under circumstances etc
stuff, where it goes,
chores

lots to say about this, more than time available. Wishing you and all of us the very best luck! aloha

[MichMan]

61. Make sure you understand the legal requirements in your town of being a landlord

May need to have a permit and home inspection etc.

[Marthe48]

62. I heard a radio ad from Parkersburg, WV

They have a state program for people to foster older people who need a place to live. I didn't pay attention to the details, don't know if other states have the same program. But maybe the people who open their homes get a tax break.

When I worked from home as an independent contractor, I had my taxes done by H&R Block. They used a formula to calculate the square footage of my office space, and percentage of the utility bills for that space. That was before 2005.

Hope things improve

[TexasBushwhacker]

63. It is taxable income

But you can deduct expenses associated with the cost and maintenance of your home, based on the square footage the tenant has access to. If the basically have access to half of the house (kitchen privileges, half the garage, etc) then you can deduct half of the expenses associated with the house - half your utilities, maintenance, homeowners insurance, etc.

[cadoman]

68. if you can't rent to family/friends -- sell and rent an apartment

Maintaining a home only gets harder as you age. Removing leaves from gutters, fixing problems in crawlspaces & attics, keeping paint repaired, etc. etc. etc. Contractors only treat you worse as you get older too.

Family help is critical. If they can pay in rent & help out it's a huge win for all involved. Savings on utilities (power, internet, plumbing, even streaming services). Shared meals. Shared errands. Someone is almost always around to protect the place.

Exceptions to this are travel nurses who are a supplemental rent income treasure if you live near a hospital.

Another thing to consider: taxed income is still income. The government will use their cut wisely for our collective benefit and you'll get to keep the remainder.