Airbnb/Short Term Rental Tax Preparation
Working through the complexities of Airbnb income can be a headache for some. Unlike other shared economy platforms, Airbnb income requires you to have a deep understanding of rental property income, various state and local room and board taxes, not to mention identifying the potential tax deductions that are available to you. For these reasons, we decided to heavily investigate these tax issues and came to better understand the tax law to help mitigate your tax liability. Through this, we’re confident in our skills to best service you and limit any unnecessary tax exposure. We have helped our clients answer the following questions:
- Do I have to report my income if I rented out my home for less than 14 days?
- Should I rent or buy another house to rent out?
- Can I deduct my water bill, electricity, and internet?
- Where do I report my Airbnb income? Is it on a Schedule E?
- Do I have to pay hotel taxes?
- What should I do if I owe taxes and did not save any money?
These questions, along with many more, have been asked by our clients, which caused us to focus on providing superior quality to Airbnb hosts. We have been able to save our clients a substantial amount of money by helping them identify all of the tax deductions that are special to their circumstances, and we’re confident that we’ll be able to apply this methodology for you to ensure that you’re saving as much money as possible.
What We Do:
Shared Economy Tax is the premier tax firm for 1099 Independent Contractors and those working in the Sharing Economy to help with tax planning, compliance, preparation, and savings. We are professional Airbnb CPAs and accountants. In terms of specific services, we provide the following:
Individual and Business Income Tax Return Preparation
Entity Selection: Corporate and LLC Tax Reporting Structures and Setup
Compliance with Local, State, and Federal Regulatory Requirements
Tax and Estate Planning
Quarterly Tax Payment Planning and Preparation
IRS Audit and Defense
Airbnb Tax Help FAQs
What are some specific deductions that I can claim as an Airbnb host?
Think in terms of operating expenses. You should track money spent on cleaning supplies, cleaning services, furniture repairs, property repairs. Be sure to track your Airbnb service fees. All of these are tax deductible.
Think in terms of property expenses. Track property taxes, utilities, and insurance premiums. These are also deduction opportunities.
Marketing expenses and advertising expenses are also items to track and consider for deductions. But these aren’t the only areas to consider. An Airbnb tax accountant can help you dive even deeper into what deductible items are available in your situation.
Will I receive any tax forms from Airbnb?
From calendar year 2023 moving forward, Airbnb will send a 1099-K form to hosts who make $600 or more in aggregate over the course of the year.
What if I just rent out a single room instead of a whole residence?
The tax implications can be different for renting out rooms versus whole properties. Deducting expenses will usually take the form of a percentage because only a percentage of your home is being used for business purposes. One way to calculate this is based on the square footage of the room versus the rest of the home. Another way to calculate it would be based on the number of rooms. An Airbnb tax professionals can help you find out what method will save you the most money.
Short-Term Rental Tax Preparation Services:
Renting your home allows you to supplement (or support) your income while providing you with great tax benefits. Below is a partial list of value-added services that our short-term rental CPAs provide to our clients:
Maximizing Home Mortgage, Rental Expense Deductions
W-2 and Start-up Expense Allocations with HomeSharing Activities
Properly structuring Short-Term Rental activities: LLC, S-Corp, Sole Proprietorship, etc.
Income and Expense Allocations Between Personal and Business
Short-Term Rental Income and Unemployment Tax Reporting
Renovating and/or Finishing a New Building on Your Property for Rental Activities
Capital Improvements to Your Property: New Heaters, Plumbing, Fixtures, etc.
Receipt and Record-Keeping Management for Tax Purposes
I started using Airbnb to rent out an extra room in my house last year and had no idea that I needed to save money for taxes when April 15th came around the corner. Luckily, I came to the Shared Economy CPA and was able to deduct more than I had anticipated and was able to save a ton of money. I would highly recommend Derek’s services to anyone who is looking to save money on their taxes and wants high-quality, professional services.
Matt – Airbnb
Los Angeles, California
Derek and his team were incredible in helping me not only fulfill my tax obligations for both Airbnb and RelayRides, but helped save me a ton of money in deductions I would have never known I was eligible for! They were smart, efficient, and gave me peace of mind as I knew they were not only tax pros in the traditional sense, but specialize in the shared economy as well! I am so happy to have found this organization!
Jenny – Airbnb