I was working on my taxes yesterday. I don't mind doing my taxes...people think this is kind of sick, but I sort of enjoy reading through the publications to figure out how to apply the rules to various situations.
Besides, some of the stuff is just funny. Like, reading Publication 525 (Taxable and Nontaxable Income), I learned:
If you receive a bribe, include it in your income.
and
Illegal income, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.
likewise
You must include kickbacks, side commissions, push money, or similar payments you receive in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.
and
If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner.
But you know what I couldn't figure out? I couldn't figure out how, or if, money I get from Victor should be reported. See, I own the house, make the mortgage payments (and therefore deduct the interest on my taxes) and pay the utilities. Every month he gives me money that we've been calling rent, although we don't have a formal rental agreement, and I've been reporting it as other income from a not-for-profit rental. But in browsing Pub. 525 yesterday, I noticed that reimbursement for expenses from riders in a car pool is not considered to be income. Seems like reimbursement for household expenses is analogous, and I was wondering if I've been paying taxes I don't need to.
I searched the IRS web page for over an hour. I was thinking...our situation is hardly unique, but I couldn't find anything regarding unmarried cohabitating couples or roommates sharing expenses. So I called the 800 number, and talked to two very friendly IRS people who ultimately gave up on trying to interpret the situation.
It was funny, really. Neither IRS person actually came out and said "You are a sap, if you hadn't told us, we'd never have known you were getting this money," but they both suggested that most people wouldn't have thought to consider it income. But since I asked, now somebody higher up that the Saturday phone bank people will be giving me a ruling some time next week.
Wanna bet on what they'll decide? (Keeping in mind that gambling winnings are also income that need to be reported on Line 21 of your 1040, although you can dedut your gambling losses from the amount of the winnings if you itemize...)