Co-habitating question

[MiikeB]

That's good to know. My co-workers were trying to tell me that because my friends are renting at my house, that i should be reporting as additional income. House is under my name, but they do just do a month to month lease. I include utilities in the rent and they're good about not using excessive water/electricity.

It most definitely is additional income. Think about it, you get to write off ALL the mortgage interest on your taxes they get to write off none. You are responsible for the mortgage, the agreement for them to pay you money to live in your house is completely separate and income.

[snafu]

If you are acknowledging income [rent] to IRS, I presume you would be able to offset a portion of that income by charging off 1/2 utilities, maintenance, replacement and repair.

Wouldn't it be simpler to work out her share of all costs and have her portion pay the equivalency to cover food, utilities, with anything left over for your maintenance/repair/replacement fund?

[GrimJack]

Thanks for the replies.

I know, and am preparing for, the other paperwork formalities like a living will, beneficiary changes, etc. My primary question was about me having the mortgage and she not.

The one comment about if there's a lease, then her payments count as income is one of the questions I had. Would I have to claim her portion of expenses as taxable income if there's a lease signed? Does that fact that it's my primary residence factor in?

For now, we are planning to keep most accounts, etc. separate. But there's still the matter of splitting expenses, and ergo my question about to have a lease between us or not.

Thanks, everyone, for the comments, and I'll be checking out the live-in agreement link as well.

DW and I have been together for 20 years now and still do not intermingle our finances (er, and we are not really married so DGF is probably more accurate). It has never been an issue, as we are both pretty independent. We are still renting but expect to buy a house in a couple of years.

[DebbieL]

GrimJack,

I think separate finances works great with 2 independent people. I never felt the need to combine finances with anyone before (I had a couple long term common law relationships). When my DH and I got married 4.5 years ago we were 36 and 32. By those ages, we were both very independent and wanted to keep control of our own finances. It worked very well for us. We have gradually joined more and more things (something I've never wanted to do before). We still keep our own accounts, but have shifted more things to joint account than before. We both like controlling our own money. I do find he's more of a spender than me, so as we've joined things, we've laid out a more defined budget. I've built in lots of spending money for him (or he'd be miserable, lol), but not so much for me! We never fight about money (which I understand is a huge issue for many couples). I never fought about money with any of my exes either (things were always separate).