You're going on vacation this summer and hope to offset some of that cost by renting out your home on Airbnb, Homeaway or another service. How many days are you hoping to rent it out? The taxman will want to know,  and the number that stands out is 14.

According to the IRS, you have 14 days each year to rent your home without paying federal income taxes. It's a provision sometimes known as the Masters exemption referring to homeowners in Georgia who rent their houses for big monehy during the seven-day Masters golf tournament. 

Here's what they know that you need to know. As long as you don't hit 15-days, you won't be liable for federal taxes on your rental.

That's not necessarily the case at the state level. Even if you don't plan to rent your home for more than 14 days, you need to be aware of state tax issues. Some states expect you to collect lodging taxes on your home or room rentals, which you may want to include in your rental fee.

Airbnb collects those taxes in some states-; but not all-;so it's important to know the rules.

In some cases, the IRS hasn't yet updated provisions for how sites like Airbnb have changed how we travel. For example, there is no place on your tax return to report tax-free rental income. This could be a problem because Airbnb (and other sites like this) will send you a 1099-K or 1099-MISC showing how much income they have reported to the IRS on your behalf. When the IRS receives these forms, it may also require documentation.

Check with your tax professional to make sure you're reporting this correctly and make sure to keep detailed records including your rental agreement, rental dates and any fees charged.

If you do hit day 15 and owe federal income tax, here are the home rental basics you need to know:

  • If you live in this house and use it as your own home, the deduction for rental expenses cannot be more than the total rent you received this year.
  • If you live there and rent it to others, divide your expenses between rental use and personal use. Compare the number of days for each type with the total days of use.
  • If a family member, any other property owners or their family, or anyone who pays less than fair rental price lives there, report deductible expenses for personal use.

You generally deduct your rental expenses in the year you pay them, so make sure to keep a detailed record of your spending.

According to the IRS, deductible expenses include:

  • Advertising
  • Auto/Travel Expenses
  • Depreciation
  • Insurance
  • Mortgage Interest
  • Rental Payments
  • Repairs
  • Utilities
  • See entire list on Publication 527

Here are the forms you will need:

  • Schedule E -Supplemental Income and Loss--Report rental property expenses and rental income here.
  • Schedule A - Itemized Deductions--Report deductible expenses for personal use here. These may include costs such as mortgage interest, property taxes and casualty losses.

There are additional tax breaks that come along with owning rental property. Remember, those who know the rules of the game save the most money. Take it from the Masters renters who keep a keen eye on all the numbers.

It's one of the best ways I know to enjoy the journey this summer.