If you’re interested in earning extra money with Airbnb, then you have probably heard A LOT of differing opinions on how to pay your Airbnb taxes.
Those mixed signals can make it really hard for you to distinguish what is the TRUTH and what isn’t.
The IRS treats Airbnb like any other independent contractor income. You will receive a 1099 k form at the end of every tax year from Airbnb. It will detail your business income through the site and the rest is up to you.
Airbnb Tax Deductions
A tax deduction is usually an expense that is incurred to help you generate more income. This helps reduce your tax liability…which means you pay less taxes…simple as that.
Some examples of tax deductions for Airbnb include:
- Mortgage or monthly lease payments
- Sheets, linens and other soft goods in your rental unit
- Cleaning fees you pay to a service provider
- Cost of gas to go to and from your rental unit
- Netflix/Hulu/entertainment service costs
You really need to keep track of all your expenses for your Airbnb unit. A powerful tool to help you record your Airbnb expenses is Bonsai.
Anything you spend to earn more income can be wholly or partially used as a deduction. The more you can write off means more money in your pocket.
You also want to stay compliant with your Airbnb tax situation and reduce your risk of tax penalties.
Airbnb Collecting Taxes
Airbnb understands that taxes are going to be around forever, so they have built some mechanisms in their system to help hosts by collecting and sending the taxes on your behalf. You still need to double check their accounting at the end of the year though!
Airbnb is now automatically collecting taxes for the following cities:
- Portland, Oregon
- San Francisco, California
- Amsterdam, Netherlands
- San Jose, California
- Chicago, Illinois
- District of Columbia, USA
- Malibu, California
Airbnb Tax Tips
Some common tax questions among Airbnb hosts are:
- Which tax forms do I file?
- Do I need a 1099…..Does Airbnb EVEN provide me a 1099?
- How can I lower my estimated tax exposure?
- How can I keep track of all my expenses?…..oh goodness….I have so many expenses.
All these questions and more will be answered by Derek Davis, Founder of SharedEconomyCPA and Bonsai.
Enjoy the replay of our Airbnb taxes webinar below that took place in February 2016 and our other that took place on March 2015…
Airbnb Tax Webinars
The information contained in this website is meant only for guidance purposes and not as professional legal or tax advice and cannot be relied upon. For specific tax advice, contact a tax professional that specializes in Airbnb.
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How do you determine how much of your mortgage to write off? My home is three bedrooms, 1 of which is exclusively used for AirBNB. What about utilities and internet? What portion should I deduct there?
Sean,
You cannot write off your mortgage. You can however depreciate the home and write-off the interest.
You can email Derek Davis at [email protected] for further clarification. He’s the expert at Airbnb taxes.
Thanks,
Jim
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Airbnb is not sending out 1099-K forms to all hosts in 2016, only to those who earned over $20k. So, without this form or a 1099-Misc, how do you report these earnings? They don’t seem to qualify as “rental properties”, so I guess it needs to be “self employment” income?
Thanks.
Hey John,
Generally speaking for our Clients – we do put Airbnb as self-employment income because it requires a significant amount of work (talking to potential guests, cleaning, bookings, etc.) You would want to put your Airbnb income on a Schedule C tax form and make sure to report all income.
You can email Derek Davis at [email protected] for further clarification. He’s the expert at Airbnb taxes.
Thanks,
Jim
I do AirBnB out of a house I rent. My question is can I write off my entire rent for the year as my tax deduction?
Shirish,
If you rent the house out FULL time on Airbnb with not one day spent their personally, then yes I believe you can write off the entire rent payment.
You can email Derek Davis at [email protected] for further clarification. He’s the expert at Airbnb taxes.
Thanks
Jim
I did airbnb out of an apartment I rent. I live in the apartment normally but I was away on the days I rented out on airbnb. I made ~3900 on airbnb over 5 months (24 nights), but was paying rent (2000/month) etc and living in the apartment. Is the income taxable? Can i deduct rent and how much would that be?
Hey Chris, If you rent out your space for more than 14 days its taxable. To write off rent it needs to be regularly and exclusively used for business. For specific tax advice, I suggest you contact a tax professional. Derek Davis of Shared Economy CPA specializes in Airbnb Taxes.
If you are hosting OUTSIDE of the USA, tax reporting is somewaht different depending on Where you are located. As an example in Canada you CAN deduct a percentage of your mortgage interest bjt should NOT depreciate your property due to increased complexity when you sell your property.
I live in Canada but am a US Citizen. I filled out a W-9 form. I realize I won’t get a 1099 form but since people are paying me for renting my place in Canada, would tax treaties exempt me from these earnings? Conversely, is this considered “US sourced” income and therefore not considered exempt?
Hey Hiro, This is a very, very complex tax issue with multiple factors for consideration. It would be best to contact a local tax professional or the Derek Davis at Shared Economy CPA. I wish I could help further.
any insight or links for how this would work for Canadians?
My friend rented out my room in Singapore on my behalf and got a payment out in her Singapore bank account.
However she moved to the states before the payment was processed. Is she subject to US income taxes? If so what %of the income is she subject to?
Thanks for this useful article, I learned a lot about tax reporing.
If Airbnb doesn’t send out 1099s to people under 20gs a year would the IRS know Whos doing Airbnb? Say I only made $18000 does Airbnb report your earnings anyway? Do you think you could answer this question for me?
is occupancy tax the same as sales tax? Or are they two different taxes? I’ve been paying sales tax for nys and county. (not NYC). Now airbnb collects occupancy taxes. The amounts look really different- lower than what I’ve calcuated for sales tax. What is required? (yes over 14 days and 20k)
Thanks for the question.
For specific tax advice, I would consider contacting Derek Davis from SharedEconomyCPA.com so that he can give you the best answers.
Thanks!
Thank you very much for posting this. I apologize for what may be a basic question, but what are the Schedule E tax rates? I can’t find them anywhere.
Hey, I would contact Derek Davis at Shared Economy CPA for specifics on the Schedule E information. Thanks, Jim
Will Airbnd provide me with a W9 for them? The gross income does not subtract their fees. So I was told since we are technically paying them we need to collect a W9 but I can not find one anywhere for them or figure out how to request one.
Question – If I rent with Air BnB I need to collect occupancy taxes and pat to the city, county and state. I need to do that myself in order to ensure compliance. Can I do that with Air Bnb?
If I make under $20,000 Air BNB does not send me a 1099. Do they still report my earnings to the IRS?
I live in a small town in Colorado. About 1 1/2 years ago we started renting out a little cabin through Airbnb. Monthly I have been submitting taxes to the State of Colorado and I recently learned that Airbnb may be submitting this for me already which means I may have double payed. Can I please get clarification on this?
Tax year 2017, I filed a schedule E last year with a Passive Activity LOSS. For 2018, I would like to file a schedule C. How do I handle the Passive Activity Loss from last year?
You should talk to your tax advisor to be sure. Taxes are always so location and person-specific that general advice almost never applies for an individual.
hi
do i have to claim prorated portion of mortgage interest or it is my choice to report the whole amount during itemization?
thank you
This is really an amazing article, Most of the information is new for me. Thanks for sharing!