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Accounting and Tax Tips Blog

Airbnb 1099 forms don’t have to be complicated. This post has all the information home-sharers need to know about 1099 forms. Form 1099 submissions are due by January 31, and they cover the previous year. For more on form 1099, read our other post “What is a 1099 and Why Does it Matter.”

RECEIVING 1099 FORMS

Airbnb issues form 1099-K if you pass 200 transactions or earn $20,000 in gross revenues (or “Gross Earnings” according to Airbnb). If you have less, you won’t receive a formal 1099-K form. Once you receive a 1099-K, you’ll need to report the exact amount shown in box 1a as gross receipts. Then, report any fees or commissions as deductions, separately. If the income recorded on form 1099 and differs from the tax form, the IRS might flag your return for a review.

Form 1099-K Gross Earnings

​Be aware that gross receipts do not equal payouts. Payouts do not include commissions and fees, so you should look at your transaction history closely. Even for smaller amounts, you should report gross earnings.

Airbnb 1099 form - Earnings and Fees

ISSUING 1099’S

​1099-MISC should be issued anytime you pay $600 in rents or services to contractors. You don’t need to issue 1099’s for personal purposes, only if you intend to deduct the expenses for business purposes. You can issue form 1099 to any individual, partnership, or Limited Liability Company (“LLC”). There’s no need to issue 1099 forms to corporations.

Typically for home sharers, the most common 1099 will be for:

  • Cleaners – Typically, cleaners are sole proprietors who operate under a fictitious business name;
  • Home Improvements – Projects that cost more than $600 require a 1099-MISC, except if the contractor is a corporation. Include supply costs if you billed them on Form 1099-MISC.
  • Landscaping – Issue a 1099-MISC to claim deductions on jobs that cost more than $600.

Just note that these only apply when you contract work. If you are purchasing supplies, an invoice should be sufficient documentation to claim a deduction. One way to limit 1099 issues is to use corporate services for these routine tasks. Corporate services, like TurnoverBnB cleaning service, don’t require form 1099, so there’s less tax-time hassle for hosts. Some corporate contractors even offer direct billing and cost-by-project reports..

The Cost of Not filing

 We definitely recommend filing 1099 forms. Failure to file can result in penalties between $30 to $100 per form. If the IRS deems that you didn’t file intentionally, you will face a minimum penalty of $250 per statement.

The IRS can disallow a deduction for contract work where form 1099 was required but not issued, so you could be looking at paying taxes on contract fees due to the lack of proper documentation. Keep track of payments to contractors in your accounting software or in a simple Excel or Google Sheet where you can easily add up totals per contractor.

HOW TO FILE 1099’S WITH THE IRS

First, you’ll want to issue a Form W9 to your contractors and use that information to fill out form 1099. We recommend issuing 1099 forms before your contractors begin working. It’s much harder to get a W9 filled out after the year is over.

Unfortunately, you can’t simply print 1099 forms online and send them to the IRS. You can only mail official 1099-MISC forms to the IRS, because each form contains a unique document locator number. In fact, sending in the wrong 1099 form incurs a $50 penalty. You can pick up hard copies at your local office supplies store (e.g., Staples or Office Max).

Indicate non-employee compensation in box 7. If you reimbursed your contractors for supplies, you’ll need to indicate that in box 7 as well. The total should include all payments, including parts and materials.

Check the IRS instructions for how to mail returns or reach out to your tax pro for detailed advice.

Help With Airbnb 1099 Forms

You don’t have to go it alone. You can save yourself from endless hours of paperwork by hiring a professional. Plus, you could save thousands in write-offs. Contact the pros at Shared Economy Tax to get help with your Airbnb 1099 today. Our tax pros will meet with you one-on-one so you can get answers to all of your questions. Sign up today to get started.