Airbnb tax deductions can help hosts save a bundle at tax time. Each deduction reduces your tax liability, so they play an important role in tax planning. There are tons of deductions, but all of them aren’t obvious. However, you’ll get the most benefit by using as many as you can. These are 5 of the most common deductions for Airbnb hosts.
Rent
Rent can be one of your biggest personal expenses on a monthly basis. If you’re renting your home and hosting it for Airbnb, it can be one of the best tax deductions available to you. This formula can help you calculate your deductible rent expense:
[Monthly Rent Expense] x [Days rented out / Days in Month] = Amount that can deduct for tax purposes
Cleaning
This expense can range from hiring a professional cleaning service to buying toilet bowl cleaner, Windex, and a vacuum.
There are many day-to-day cleaning expenses that you incur to keep your place clean for guests which are tax-deductible!
Furniture
This is a great tax deduction, especially if you purchased furniture for purposes of Airbnb. Such Expenses can include beds, desks, drawers, and other household items relating to your Airbnb rental business. There may be special rules that apply to furniture so please be sure to speak with a competent tax professional regarding this.
Electricity/Cable TV/Water and Sewer
This is often the most overlooked tax deduction but it can save you a pretty penny when it comes around to tax season time. To figure out the amount you can deduct for these expenses, use the following formula:
[Amount spent on electricity, cable, etc.] x [Days rented out / Days in month] = Amount that can be deductible for tax purposes
Food
This is a great tax deduction if you provide food for your guests and its an ordinary and necessary part of running your Airbnb listing. Make sure to keep track of every expense that’s related to business versus personal.
How to Maximize Your Airbnb Tax Deductions
Airbnb tax deductions are only the beginning. A personalized tax strategy can maximize your savings and help your business grow. The experts at Shared Economy Tax specialize in tax planning for homeshare hosts, so our advisors have the expertise your business needs to succeed. Get started today with a no-obligation, one-on-one strategy session with a Shared Economy Tax pro. You can also sign up for our newsletter using the form below for more free tax tips.