Tuesday, March 26, 2019
News 12 at 6 o'clock/NBC at 7
AUGUSTA, Ga. (WRDW/WAGT) -- It's crunch time if you're renting out your home for Masters week and there's even less time left if you're also renting out for the women's tournament.
This is the first year Augusta is hosting two tournaments and it's also the first year some people may get stuck with a tax bill.
Fourteen is the magic number. If you rent your home out for more than 14 days, then you'll have to pay Uncle Sam.
"The living room area and kitchen are done I still have to do the bedrooms," said Jessica Collins.
Jessica Collins is still checking off her to-do list.
"I try to clear out one shelf in the chest of drawers and the closets for the guests," said Collins.
It's extra work, but it's also extra cash.
"Clean the sheets, take the trash out, leave them water. I said, 'Hmm let me try this,' and so at the last minute I put it up in February and I was booked," said Collins.
This year, there is a new tournament in town and some homeowners could be renting out for twice as long.
"Most Masters rentals are only 7 to 8 days," said Elaine Wegrzyn.
Elaine Wegrzyn wouldn't be surprised to see a few shocked clients next tax season.
"If you rent your home more than 14 days of the calendar year then the whole thing can be taxable," said Wegrzyn.
That's right, if you rent out your home more than two weeks throughout the year, Uncle Sam will come knocking.
"If you don't deal with the 1099 that you receive, the IRS is probably going to send you a friendly letter," said Wegrzyn.
Once you receive the 1099 MISCS form you need to fill this out a 1040 Schedule E form and check number three, vacation short term rental.
Here's the good news, if you have to fill out a 1040 then you may be able to write some expenses off.
"Say you rent out your home for 25% of the year then you would take that 25% of your expenses and prorate them and be able to use though expenses the 25% your rent your utilities and you could take that as deductions against the rental income," said Wegrzyn.
Collins is renting just for the main tournament.
"It’s nice to have a little bit extra for a vacation or something," said Collins.
Airbnb, VRBO and HomeAway track all activity. Anyone with more than 200 reservations or earn more than $20,000 they'll send a 1099.
The best advice is to talk to your tax preparer before listing your home.