Running a vacation rental business with VRBO, HomeAway and Airbnb can be lucrative. However, there are also a lot of tax and accounting issues to consider.
When you use a short-term rental marketplace, you need to carefully track your income and expenses so that you are prepared for tax time. Hiring accounting professionals and an accountant can help to relieve a lot of stress.
However, you should also know what is required to effectively maintain your business accounts year round. Follow these tips for organizing your finances and working with a good Airbnb accountant.
Bookkeeping, Accounting, & Taxes For Your Rental Property
When it comes to bookkeeping for your Airbnb business the most important thing to do is to make sure that you stay organized throughout the entire year. This means keeping your personal finances separate from your business and making sure that you organize receipts and other documentation as you incur business expenses.
You should also make sure that you regularly reconcile your short-term rental earnings from the marketplace’s dashboard with your bank statements. A professional bookkeeping service can assist you with this task by importing your bank records into professional accounting software and performing the reconciliations on your behalf.
It’s a good idea to work with a bookkeeper on a monthly or quarterly basis. If your business is growing rapidly, you may even need to upgrade to a weekly or daily schedule for reconciling your business transaction records.
Even though you are staying on top of your finances, make a point to find a good Airbnb accountant when you first start out and stay in contact regularly, not just at the end of this year. This will allow you to have the opportunity to discuss tax strategies that you can use to minimize your tax bill and ensure that you claim all of the deductions that you are entitled to.
Small Business Tax Tools And Resources
There are a variety of small business tools available on the web to help you manage your short-term rental business. First, you should learn and bookmark all of the tax websites of the federal and local tax authorities that you pay taxes to. For federal taxes, refer to the IRS’s Small Business and Self-Employed Tax Center. This will allow you to check for changes to the tax law, such as forms that require online filing or changes to the tax code that could affect what your short-term rental business owes.
Secondly, you should also invest in accounting software such as Wave Apps or Intuit Quickbooks. Your accountant will likely recommend these softwares to help in preparing your taxes. Major cloud accounting software platforms offer learning tools and extended support so that you can become acquainted with at least the basics of small business tax preparation.
Why Hire An Accountant For Your Short-Term Property Rental Business
With all that is required to manage your accounting for a short-term rental business, it isn’t hard to see why you should hire an Airbnb accountant. By hiring an accountant who specializes in accounting for short-term rental business, you can feel confident that you are working with a professional that understands the changing tax landscape that affects short-term property rental business owners.
You are probably well aware of the fact that most tax laws were passed before the internet was created. As a result, the government is playing catch up with businesses that profit from new technologies, such as Airbnb, HomeAway, and VRBO, in terms of how to tax their businesses. Many current tax laws are also unclear which make the process even more complicated.
Working with an Airbnb accountant will help you to ensure that your taxes are being prepared correctly and on-time. You’ll also receive peace of mind knowing that you are managing your short-term rental business in a manner that will help you to meet your financial goals.