Can renting rooms in my house qualify as tax write offs for my short-term rental business?

You're in an interesting position with your short-term rental business. The key question is whether these expenses are "ordinary and necessary" for your business. Since you're already operating a legitimate rental business and are looking to expand, many of these expenses could qualify as legitimate tax write offs. Travel costs to evaluate potential rental properties would generally be deductible as business expenses if the primary purpose is truly business-related. Keep detailed records showing the business purpose for each trip - take photos of properties, save emails with real estate agents, and document all property viewings. Conferences related to real estate investing or short-term rentals would also likely qualify as legitimate business education expenses. Consultant fees for finding investment properties would typically be capitalized into the cost of any property you purchase, rather than being immediately deductible. The most important thing is maintaining a clear separation between personal and business activities. If you combine business travel with vacation, you need to clearly allocate which portions were business vs. personal.

After struggling with my own rental property tax questions, I found this amazing tool that saved me hours of research and potentially thousands in deductions. It's called taxr.ai (https://taxr.ai) and it analyzes your specific rental situation to identify all potential tax write offs. I uploaded my rental documents and it immediately flagged several deductions I had missed, including some partial home office deductions related to managing my rentals and certain maintenance expenses I hadn't thought to include. For someone like you looking to expand your rental business, it can confirm exactly which travel expenses qualify and what documentation you need to keep to satisfy IRS requirements. What impressed me most was how it explained everything in plain English while still being technically accurate. Definitely worth checking out before you file!

Just wanted to update everyone - I tried taxr.ai after seeing it mentioned here and it was actually super helpful for my situation. I was nervous about deducting some travel expenses for checking out potential rental properties, but the tool showed me exactly what's allowed and what documentation I need to keep. It pointed out that I could partially deduct my home internet and cell phone since I use them to manage my rentals, which I had no idea about. It even created a customized tax checklist for me with all the receipts and records I should be keeping. Saved me a ton of time researching all this stuff myself!

If you're expanding your rental business, you're probably going to need to talk to the IRS at some point about these deductions. After trying for WEEKS to get through to them about my rental deduction questions, I finally used Claimyr (https://claimyr.com) and got through to an IRS agent in under 15 minutes. I was honestly shocked it worked so well - I'd been calling for days and getting nowhere. They have this cool system that monitors the IRS phone lines and calls you when an agent is about to be available. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent actually gave me really specific guidance on what rental travel expenses would hold up in an audit and which ones were questionable. Much better than just guessing or hoping I was interpreting the tax code correctly!

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it myself since I've been having issues with missing rental income documents. Got connected to an IRS agent in about 11 minutes and they actually helped straighten out my missing 1099 issue. The agent was able to confirm what was reported to them and advised me exactly how to handle the discrepancy on my return. For anyone expanding their rental business, being able to get clear answers directly from the IRS is incredibly valuable. They can't give "tax advice" but they can clarify reporting requirements and documentation standards, which is often what you really need anyway.

Former tax preparer here - one thing nobody's mentioned yet is that if you're operating short-term rentals, you need to be really careful about material participation requirements. This affects whether your rental activities are considered passive or active, which impacts how losses can be deducted. Short-term rentals (average stay less than 7 days) are generally considered a business rather than a passive rental activity, which changes the tax treatment significantly. You'll want to track your hours spent managing the properties, advertising, communicating with guests, etc. Also, regarding travel expenses - a mistake I saw clients make all the time was trying to deduct trips that were 90% vacation and 10% "looking at properties." The IRS isn't stupid. The primary purpose needs to be business, or you need to clearly allocate which days/expenses were business vs. personal.

Is anyone using TurboTax for their rental properties? I'm trying to figure out if I need to upgrade to their premium version or if the deluxe is enough to handle my two rental rooms situation similar to OP.