You're not going to like this question, but...

[Mike Faulkner]

As a self-employed VERY small business owner paying approximately 40% of my profit in income tax every year, I am (understandably) not interested in giving the IRS almost half of the money my tenants will pay for renting a bedroom in my private home where I live.  I'll be paying utilities and my own rent with that money. Yes, I rent and my landlord doesn't care if I sub out my spare room. All of the rent will still come straight out of my checking account. 

My question is simple: Am I wrong in assuming that all rent money in this situation must be reported on my federal tax return as income?

I think I know but I'm hoping I don't. That's the only reason I'm asking. 

I know that now, anything put on Cash App, PayPal, Chime, etc. over $600 per year is automatically reported to the IRS. Thus, I am thinking that at the end of the year, I'm going to have to fork over almost $4k to the IRS in a lump sum. 

Gosh, that makes me sick.

[Greg Scott]

Instead of paying taxes on 100% of the rental income, I would think you could allocate some of your rent and utility costs as expenses for that bedroom such that your total tax bill is lower.  This is where it would be worth the expense to have a CPA that knows real estate involved.