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Daycare and Taxes>Claiming Rent As Income?
ihop 06:06 PM 01-14-2014
My dbf and I live together(his house). If for the 6 months that I have had the daycare here, I have contributed, in cash, half of the utilities and mortgage. He pays all of the bills in their entirety to the companies from his bank account.

He thinks that if I use what I paid, as a deduction, that he will have to them pay taxes on the cash I was contributing to the household.

Does anyone know how this works?
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sahm1225 09:04 PM 01-14-2014
You shared the mortgage expense, you weren't his tenant, so I'm going to say no he doesn't claim it as income.
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BrooklynM 09:23 PM 01-14-2014
I think your bf is correct. If you are trying to write off your housing as a deduction, it would be like you are renting from your bf, and he would need to claim that as rental income since he is able to write off the full mortgage interest from his taxes, otherwise you both benefit from the same mortgage payment. I'm not a CPA though, just check with one and they will let you know!
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craftymissbeth 06:01 AM 01-15-2014
I wouldn't think he'd have to claim it as income. It wasn't income... it was just your portion of the bills. Maybe Tom will see this and chime in.
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TomCopeland 08:21 AM 01-15-2014
Originally Posted by ihop:
My dbf and I live together(his house). If for the 6 months that I have had the daycare here, I have contributed, in cash, half of the utilities and mortgage. He pays all of the bills in their entirety to the companies from his bank account.

He thinks that if I use what I paid, as a deduction, that he will have to them pay taxes on the cash I was contributing to the household.

Does anyone know how this works?
If you want to deduct the amount you paid, your friend will have to treat it as rent and report it as income on Schedule E. He can also claim some house expenses as a deduction on Schedule E.

If you don't try to deduct it as rent, he doesn't have to report it as income.
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ihop 10:02 AM 01-15-2014
Hmmm. I hate when I'm not right

Does this also go for utilities, since it is obviously a daycare expense?
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TomCopeland 11:57 AM 01-15-2014
Originally Posted by ihop:
Hmmm. I hate when I'm not right

Does this also go for utilities, since it is obviously a daycare expense?
If your name is on the utility bill you can deduct the time-space% as a business expense. If it's not, then you can't deduct it unless your boyfriend claims it as rent.
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Tags:income - profit, income tax, rent, time space percentage
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