While a small number of tax credits and deductions apply to homeowoners only, the fact is there are several breaks that you can also claim if you’re a renter.
1. Property Tax
Check to see if you pay property taxes as part of your lease agreement. If you do, you can deduct that portion of your rent or any property tax you pay directly. Additionally, you can deduct property losses or damage due to a federally declared natural disaster.
2. Home Office
If you use a portion of your rental home as your principal place of business, you could be eligible for the home office deduction. The amount you can deduct depends on the size of your space and whether you choose the simplified or regular method to calculate your expenses. The simplified method lets you deduct $5 per square foot for up to 300 square feet. The regular method bases your deduction on percentages.
3. Renter’s Tax Credit
Some states offer a credit for renters. It is based off how much estimated rent landlords charge to cover property taxes. To see if your state honors this credit, contact your state’s department of revenue.
4. Charitable Giving
If you itemize on your taxes, you can deduct charitable contributions worth up to 60% of your adjusted gross income. Here are the rules for donating items like clothing and household goods.
5. Education Credits
If you are in college while renting your apartment or house, consider claiming the American Opportunity Credit or Lifetime Learning Credit. You can only claim one of these credits per year, so choose the one that best fits your situation. If you are a parent with a student in college, you might be able to claim these credits as well.
6. Student Loan Interest Deduction
College is expensive, especially if you are also paying rent. If you are working on your degree or you’re working to pay it off, you can deduct up to $2,500 for the interest you pay on your student loans. Learn more.
7. Self-Employed Deductions
When it comes to paying rent, every little bit helps. For lots of Americans, that means extra income from a side gig. If you receive a 1099 from an employer, the IRS considers you self-employed. In that case, there are several small business deductions you could take if they are necessary for your job. TaxSlayer Self-Employed finds all the breaks you deserve and makes it easy to file your return as a renter and a side hustler. Read also: 8 Deductions for Creative Freelancers
For more information about tax breaks for renters and homeowners, check out our infographic below.
This article is up to date for tax year 2021 (tax returns filed in 2022).