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Accounting and Tax Tips Blog

As a new Airbnb host, you will be responsible for saving for taxes along with other regulatory requirements. Before you open your area to your future guests, you might want to think about the tax implications before you start hosting.  Below is a tax checklist for new airbnb hosts:

  1. Check your local municipality website for business license regulations.  Every municipality is different and has differing rules regarding who does and does not need a business license.  Typically, the function of any Airbnb space is comparable to a bed and breakfast.  Your guests usually stay for 30 days or less and you may provide some food and cleaning services.  You need to understand your zoning laws and respective responsibilities.
  2. Check your lease, condo or homeowner association bylaws (if applicable).  Sometimes tenant organization have strict rules on short-term rentals and it is important to know the implications.  It is also important to think about parking and other short term conveniences for your guests, keeping in mind your neighborhood and more importantly, neighbors. We have unfortunately helped numerous clients who were evicted for non compliance with local HOA and related regulatory rules.
  3. Understand if you are subject to Transient Occupancy Tax.  Transient Occupancy Tax (TOT) is commonly referred to as Hotel Taxes.  These are authorized by your city or county code.  Like traditional hotels, in many areas across the county, legislation has been enacted requiring Airbnb Host’s to charge TOT to your guests as the hotels do.  In most jurisdictions, hosts are required to keep accurate records and submit the proper forms and fees to the city on their own accord.  Recently, Airbnb has started collecting TOT in a number of cities both in America and worldwide.  See our blog here for a sample list of cities that require TOT.  There are a number of ways to report the tax, so it is important that you check your local authorities for up-to-date information regarding short-term rentals.
  4. Fill out Form W-9 with Airbnb.  Without this form, Airbnb has no choice but to withhold 28% of all of your earnings to the government.  Once you submit the proper paperwork to Airbnb, you will receive the maximum amount of your earnings from the company, less the hosting fees that the company charges.

If you have any questions or confused about the tax implications for your new property, please feel free to reach out to us here.