Money Talk with Liz Weston: Avoid deducting personal expenses
Liz Weston April 7, 2024
Dear Liz: I am the sole owner of a condo. I am getting ready to realize a dream of mine by traveling around the world. I will be gone indefinitely. Thus, I am thinking about renting out my condo. I know I get a write-off for repairs on the unit, cleaning supplies, etc. What about the storage unit where I will need to store my things from my unit. Can I write off the storage unit?
Answer: Congratulations on your upcoming adventure! Youll have excitement enough without defending yourself in an IRS audit, so avoid deducting personal expenses such as a storage unit.
The IRS says you can deduct the ordinary and necessary expenses for managing and maintaining a rental property. That includes mortgage interest, taxes, operating expenses, depreciation and repairs.
If the storage unit was used in conjunction with the rental activity, such as storing maintenance supplies for doing work on the rental property, a deduction could perhaps be justified, says Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting.
However, you wont be around to do that work, so deducting the storage unit isnt going to fly.
Dear Liz: I am 85 and have been living (unmarried) with a man since about 1977. We have always filed our tax returns separately and now we both collect Social Security. I have been told that when one of us passes, the other cannot collect the deceased ones benefits. We have been thinking about getting married and would like to know if there is a time regulation involved.
Answer: You generally must be married for at least nine months to qualify for Social Security survivor benefits. Keep in mind that the survivor will collect only the larger of a couples two checks; the smaller benefit goes away.
So marriage could benefit the lower earner financially, and give the higher earner peace of mind, knowing that their lower-earning partner will have access to the larger benefit. Marriage has a number of other financial and legal benefits, including the ability to make decisions for your spouse should they become incapacitated.
Marriage would end your ability to collect a divorced spousal benefit from a previous spouse, however. If either of you have been married before and the marriage lasted at least 10 years, investigate whether you might qualify for a larger benefit based on that partners work record. If the previous spouse has passed, you may qualify for a divorced survivor benefit. Unlike divorced spousal benefits, divorced survivor benefits dont end at remarriage as long as youre 60 or older when you remarry.
Dear Liz: I have an 834 credit score, with
3 three
credit cards. I dont carry debt or pay annual fees. Im considering closing one of my cards and replacing it with one available through my credit union. Is it worth the hassle?
Answer: Closing accounts wont help your credit scores and may hurt them. If theres no compelling reason to close a card, you might consider leaving the account open and using the card occasionally to prevent the issuer from closing it.
You also might want to rethink your stance on annual fees. These days, few cards without annual fees offer rewards, while many cards offer rewards that more than offset their fees. If youre new to the rewards card world, consider getting a simple cash-back card. If youre interested in travel benefits, look for a card that gives you points that you can transfer to
various
frequent traveler programs.
If youre determined to close the account and open another, apply for the new card first since the closure may drop your scores.
Liz Weston, Certified Financial Planner, is a personal finance columnist for NerdWallet. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at
.
