A vacation home can be a house, apartment, condominium, mobile home or boat. If you own a vacation home that you rent to others, you generally must report the rental income on your federal income tax return. But you may not have to report that income if the rental period is short.
In most cases, you can deduct expenses of renting your property. Your deduction may be limited if you also use the home as a residence.
Here are some tips from the IRS about this type of rental property.
? You usually report rental income and deductible rental expenses on Schedule E, Supplemental Income and Loss.
You may also be subject to paying Net Investment Income Tax on your rental income.
? If you personally use your property and sometimes rent it to others, special rules apply. You must divide your expenses between the rental use and the personal use. The number of days used for each purpose determines how to divide your costs.
Report deductible expenses for personal use on Schedule A, Itemized Deductions. These may include costs such as mortgage interest, property taxes and casualty losses.
? If the property is ?used as a home,? your rental expense deduction is limited. This means your deduction for rental expenses can?t be more than the rent you received. For more about this rule, see Publication 527, Residential Rental Property (Including Rental of Vacation Homes).
? If the property is ?used as a home? and you rent it out fewer than 15 days per year, you do not have to report the rental income.
For more details on this topic, check out IRS Publication 527. It is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
From IRS Tax Tips Newsletter:
Do you plan to travel while doing charity work this summer? Some travel expenses may help lower your taxes if you itemize deductions when you file next year. Here are five tax tips the IRS wants you to know about travel while serving a charity.
1.?You must volunteer to work for a qualified organization. Ask the charity about its tax-exempt status. You can also visit IRS.gov and use the Select Check tool to see if the group is qualified.
2.?You may be able to deduct unreimbursed travel expenses you pay while serving as a volunteer. You can?t deduct the value of your time or services.
3.?The deduction qualifies only if there is no significant element of personal pleasure, recreation or vacation in the travel. However, the deduction will qualify even if you enjoy the trip.
4.?You can deduct your travel expenses if your work is real and substantial throughout the trip. You can?t deduct expenses if you only have nominal duties or do not have any duties for significant parts of the trip.
5.?Deductible travel expenses may include:
- Air, rail and bus transportation
- Car expenses
- Lodging costs
- The cost of meals
- Taxi fares or other transportation costs between the airport or station and your hotel
To learn more see Publication 526, Charitable Contributions. The booklet is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Many healthcare professionals work based on the Academic Calendar. That means that a lot of Doctors switch jobs over the summer. According to our friends at the IRS in their IRS Summertime Tax Tip 2012-06:
Summertime is the season that often leads to major life decisions, such as buying a home, moving or a job change. If you are looking for a new job that is in the same line of work, you may be able to deduct some of your job hunting expenses on your federal income tax return.
Here are seven things the IRS wants you to know about deducting costs related to your job search:
- To qualify for a deduction, your expenses must be spent on a job search in your current occupation. You may not deduct expenses?you incur while looking for a job in a new occupation.
- You can deduct employment and outplacement agency fees?you pay while looking for a job in your present occupation. If your?employer pays you back in a later year for employment agency fees, you?must include the amount you received in your gross income, up to the amount of your tax benefit in the earlier year.
- You can deduct amounts you spend for preparing and mailing copies of your r?sum? to prospective employers as long as you are?looking for a new job in your present occupation.
- If you travel to look for a new job in your present?occupation, you may be able to deduct travel expenses to and from the area to which you travelled. You can only deduct the travel expenses if the?trip is primarily to look for a new job. The amount of time you spend on personal activity unrelated to your job search compared to the amount of time you spend looking for work is important in determining whether the?trip is primarily personal or is primarily to look for a new job.
- You cannot deduct your job search expenses if there was?a substantial break between the end of your last job and the time you begin looking for a new one.
- You cannot deduct job search expenses if you are looking for a job for the first time.
- In order to be deductible, the amount that you spend?for job search expenses, combined with other miscellaneous expenses, must exceed a certain threshold. To determine your deduction, use Schedule A, Itemized Deductions. Job search expenses are claimed as a miscellaneous?itemized deduction. The amount of your miscellaneous deduction that?exceeds two percent of your adjusted gross income is deductible.
For more information about job search expenses, see IRS Publication 529, Miscellaneous Deductions. This publication is available on www.IRS.gov or by calling 800-TAX-FORM (800-829-3676).
- Schedule A, Itemized Deductions (PDF)
- Publication 529, Miscellaneous Deductions (PDF)