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.
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?