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Accounting and Tax Tips Blog

How do you report Airbnb taxes? Estimated tax planning is the best way to ensure that your taxes are properly filed as an Airbnb host. Here are some tips to help you prepare your Airbnb taxes so that you can avoid tax problems. This post specifically focuses on Airbnb tax planning. If you’re looking for more general information on tax strategies, check out our main post on tax planning here. 

airbnb tax planning

How To Pay Tax On Airbnb Income?

If you owe taxes for Airbnb, the first thing you need to do is determine whether to use Schedule C or Schedule E to report your income. Schedule C filers declare their Airbnb income as business income, so they can deduct eligible business expenses from their revenues. If you use Schedule E, the IRS classifies your rental income as passive, so you can’t deduct your related business costs.

When you file using Schedule C, you must also pay self-employment taxes on your income, which include Social Security and Medicare taxes. Self-employment tax deposits must be made on a quarterly or monthly basis depending on your income.

If you owe more than $1,000 in personal income taxes for the year, you probably need to make estimated tax payments every quarter. Each year, you need to pay a portion of your estimated taxes four times a year. Usually, the deadlines for each quarter fall on April 15, June 15th, and September 15th of the current year, with one more for Q4 on January 15th of the following year.  If you’re not sure about your tax status, consult with a tax professional. Make sure you meet your obligations or the IRS could penalize you.

What Airbnb Hosts Need To Know About Taxes

In addition to federal income tax, Airbnb hosts may also be responsible for paying state and local taxes. Before you start hosting with Airbnb make sure that you register with the appropriate tax authorities as applicable to your business.

In many jurisdictions across the country, Airbnb hosts must pay occupancy tax, which may also be known as a lodging tax, a room tax, a sales tax, a tourist tax, or a hotel tax. Occupancy tax rates and rules may vary, but they’re generally paid by the guest. However, the obligation to remit those taxes typically falls on the host.

In some jurisdictions, Airbnb may collect and remit this on your behalf. However, this feature isn’t available everywhere. Ultimately, you’re responsible for meeting local tax obligations, so make sure you are familiar with local regulations.  Also, be aware that VRBO, Homeaway, and other platforms usually don’t withhold local taxes. On the other hand, Airbnb automatically deducts local taxes from your earnings.

An Airbnb tax expert can assist you with tax planning. That way, you’ll have a better idea of your tax liability in advance.

Airbnb Tax Preparation

You need to report your Airbnb earnings correctly, or you could make errors on your taxes. Airbnb issues 1099-K forms to hosts who earn over $20,000 and processed 200+ transactions within a calendar year.

If you don’t meet those criteria, you won’t receive a 1099K. In that case, you should report the earnings listed in your Airbnb Transaction History. If you receive 1099-K form, make sure you reconcile the form against the earnings on your Transaction History.

You also need to fill out your taxpayer info correctly or else Airbnb will withhold income from your earnings. Airbnb might even withhold than you actually owe, so it’s best to handle it on your own. If you fill out the taxpayer information, Airbnb won’t withhold any of your earnings. 

professional airbnb tax planning

Professional Airbnb Tax Planning

If you have a thriving Airbnb business, you should consider hiring a professional tax adviser. A tax specialist can put together a customized tax strategy and show you how to maximize your savings. Tax planning with a professional adviser could save you a lot of money on taxes, so it’s worth taking a look. The experts at Shared Economy tax specialize in Airbnb taxes, so they understand the unique needs of home-share hosts. A quick chat could tell you whether your tax planning is on track or if there are better options. Get started today with a no-obligation, one-on-one strategy session with a Shared Economy Tax pro today. You can also use the form below to sign up for our newsletter for more free tax tips.      

A tax professional can provide you with tax advice that is relevant to your specific situation to ensure that your taxes are properly filed. Finally, working with a tax professional will also enable you to claim all of your applicable business deductions so that you can minimize your tax liability.