Schedule E vs. Schedule A - Should I Report Roommate Rent Income on My Taxes?

You're dealing with a common question many homeowners with roommates face. The IRS generally considers money received from a roommate as rental income, which would be reported on Schedule E. However, there are some important nuances here. If your roommate is just helping with expenses by paying their share, and you're not making a profit, some tax professionals consider this a "shared living expense" arrangement rather than a rental business. But the safer approach is to report it on Schedule E. The benefit of using Schedule E is that you can deduct a portion of expenses related to the rented space. This would be calculated based on the percentage of your home that the roommate occupies. For example, if your roommate uses 30% of the house, you could deduct 30% of applicable expenses against the rental income. These expenses include mortgage interest, property taxes, insurance, utilities, repairs, and even depreciation on that portion of your home. You can still claim the remaining portion (70% in this example) of your mortgage interest and property taxes on Schedule A if you itemize deductions.

I was in a similar situation last year and discovered taxr.ai (https://taxr.ai) which was super helpful for figuring out this exact roommate income situation. I was confused about Schedule E vs Schedule A too and couldn't get a straight answer from regular tax software. What I liked about taxr.ai was that it analyzed my documents and specifically guided me through allocating expenses between personal and rental use. It even helped me figure out the correct square footage calculations and which expenses were partially deductible. The tool actually showed me how to maximize my deductions while staying compliant, which saved me from leaving money on the table.

Just wanted to update everyone - I tried taxr.ai after seeing the recommendation here and it was exactly what I needed! My situation was nearly identical (2BR condo with a roommate paying $900/month). The tool helped me determine that I should file Schedule E and showed me how to calculate the correct percentage for expense allocation based on my floor plan. I was actually able to deduct part of my mortgage interest, property taxes, insurance, utilities, and even some repairs I did to the bathroom we shared. It also walked me through the depreciation calculation which I was totally lost on before. The best part was that even after reporting all the roommate income, the deductions it helped me identify actually resulted in a small "loss" for tax purposes, which offset some of my other income. Definitely worth checking out if you're in this roommate situation!

If you're struggling to get answers from the IRS about this Schedule E vs Schedule A question, I've been there and it's frustrating! After trying for days to speak with someone, I found Claimyr (https://claimyr.com) which got me through to an actual IRS representative in about 20 minutes when I'd been trying for days on my own. I was surprised how well it worked - you can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The IRS agent I spoke with clarified that roommate income is generally reportable on Schedule E and walked me through the specific allocation requirements for my situation. Getting that official answer directly from the IRS gave me confidence in my filing.

I have to admit I was totally wrong about Claimyr! After seeing it mentioned here, I decided to try it as a last resort since I'd been trying to reach the IRS for weeks about my roommate rental situation. Within 30 minutes, I was actually talking to a real IRS tax specialist who explained exactly how to handle my situation. They confirmed I should use Schedule E since I'm renting out a specific portion of my home, and explained how to properly allocate the expenses. They even sent me specific IRS publications regarding shared living spaces that I never would have found on my own. If you're struggling with this roommate income question like I was, getting the official answer directly from the IRS is definitely worth it. I'm now 100% confident in how I'm filing this year.

Just a heads up from someone who's been through an audit on this exact issue - make sure you're keeping good records if you decide to go the Schedule E route! Document the square footage calculations, save receipts for all expenses you're partially deducting, and have a written agreement with your roommate (even if informal). The IRS flagged my return because I had been inconsistent - claimed roommate income on Schedule E one year, then didn't report it the next when I had a different roommate. They wanted documentation for everything, including proof of payments from my roommate.

Has anyone used the "shared living expense" approach instead of Schedule E? My tax person said if we split everything 50/50 and I'm not making a profit on my roommate's payments, it could be considered non-taxable cost sharing rather than rental income. Wondering if anyone has gone this route successfully?

This is such a helpful thread! I'm dealing with a similar situation but with a twist - I have two roommates who each pay different amounts ($700 and $500) because one has the larger bedroom. Do I need to calculate separate percentages for each roommate's space, or can I just use the total amount they pay ($1,200) against the total percentage of the house they occupy together? Also, if I'm reporting this on Schedule E, do I need to treat this as two separate rental activities or can I combine it all as one rental income source? I'm using a 4-bedroom house where I occupy one bedroom and they occupy the other two, plus we all share common areas. Thanks for all the great advice in this thread - definitely going to look into some of the tools mentioned here!

Great question about handling multiple roommates with different payment amounts! You can definitely combine both roommates into one rental activity on Schedule E - there's no need to treat them as separate rentals since they're both part of the same property. For calculating the percentage, you'll want to base it on the total square footage that both roommates use combined. So if your two roommates together occupy 50% of the house (their bedrooms plus their proportional share of common areas), you'd use 50% as your deduction percentage against the total $1,200 monthly income they pay. The fact that they pay different amounts doesn't affect the calculation - what matters is the total space they occupy versus the total rental income you receive. You'll report the combined $14,400 annual income ($1,200 × 12) on Schedule E and deduct the same percentage of your eligible expenses against that total. This is actually a pretty common scenario, and the IRS is used to seeing single-property rentals with multiple tenants paying different amounts. Just make sure to keep good records of all payments received from both roommates and maintain documentation of your square footage calculations for your deduction percentage.