Tax help for Airbnb and VRBO hosts
You already track occupancy, turnover cost and payouts. Here is what the tax return does with all of it, and what to bring us.
Nothing is due today. Personal returns start at $250.
Hosting is not quite owning a rental house and not quite running a business, which is why the rules can feel like they contradict each other. Three things drive your return: how long guests stay, what services you provide during the stay, and how many nights you or your family used the place yourself. The number on your 1099-K is also not the number that reached your bank, and that gap is worth sorting out before you file.
What short-term rental hosts can usually deduct
Ordinary and necessary costs of your work. Rules and dollar limits change year to year, so we confirm every one of these against the current year when we prepare your return.
Cleaning and turnover
What you pay cleaners between stays, laundry and linen service, trash haul out, and the restock run after a checkout.
The cleaning fee you charge the guest is income, not a wash. You report the fee you collected and deduct what you paid the cleaner as its own line.
Guest supplies and consumables
Coffee, paper goods, soap and toiletries, trash bags, batteries, light bulbs, propane for the grill, pool and hot tub chemicals, the welcome basket.
Ring these up separately. The store run that mixes your family's groceries with guest supplies is the receipt that does not survive a question.
Linens, furniture and appliances
Beds and mattresses, mattress protectors, sofas, dishware, blackout curtains, the TV, the washer and dryer, patio furniture, the crib and the high chair.
Furnishings are generally recovered over more than one year rather than in a single line, and elections exist for smaller purchases that can change that, so ask before you assume either way. Anything bought before your first guest starts counting when the place is ready to rent, not on the day you paid.
Platform and host software fees
Airbnb and VRBO host service fees, card processing on direct bookings, your channel manager and messaging tool, dynamic pricing software, listing photography, your direct booking site.
Platform fees come out of your payout before you ever see the money, but the 1099-K reports the gross. If you do not deduct the fees, you are taxed on money that never reached you.
Locks, sensors and wifi
Smart lock and keypad, doorbell camera, noise monitors, smart thermostat, router, and the internet plan for the unit.
If one internet line serves both the rental and your own house, only the rental share counts, and you need a reasonable way to explain how you split it.
Utilities for the rental
Power, water, sewer, gas, trash, pest control, lawn service, pool service, and any streaming subscription that lives on the rental TV.
Nights you use the place yourself shrink the deductible share. If you rent a room inside your own home, the split runs on both space and days, and a personal use test can limit your deductions for the year when your own use is heavy, which is why the night count matters.
Insurance, permits and licenses
Short term rental insurance or the endorsement on your homeowner policy, umbrella liability, the city or county rental permit, the fire or safety inspection, the local business tax receipt.
Lodging and tourist tax you collect from guests is generally not your income and not your deduction, because you are holding it and passing it along. How it lands on the return depends on who collected it and who remits it, and platforms handle some layers in some places and none in others, so check property by property.
Mortgage interest, property tax, HOA
The rental share of your mortgage interest, property tax, HOA or condo dues, and any special assessment.
The same dollar cannot be deducted twice. What goes against the rental cannot also ride as a personal itemized deduction, and personal nights reduce the rental share.
Repairs between guests
Patching drywall, replacing the broken blind, clearing the disposal, repainting a scuffed room, fixing the AC after a guest complains.
A repair keeps the place working and is generally deducted this year. A new roof, a gutted bathroom or a new deck is an improvement and is recovered over years. The full renovation you did before the first guest is not a repair at all.
Depreciation and improvements
The building itself over the recovery period set by the tax law, plus improvements and the furnishings inside it. Land is never depreciated. On a larger property, a cost segregation study can move some of the recovery earlier.
Depreciation is not something to skip. When you sell, your basis is reduced by the depreciation allowed or allowable, whether you claimed it or not. If you have missed years, there is a formal procedure for correcting it, so tell us instead of quietly starting fresh.
Mileage to the property
Driving out for a turnover, the supply run, meeting the handyman, checking the place after a storm.
Use the standard mileage rate the IRS publishes for that year or your actual vehicle costs, and keep a log with the date, the miles and the reason. Trips tied to an improvement or to getting the place ready for the first guest get added to that cost rather than deducted now, and a trip where you stay at the property yourself is personal, as is that night.
Bookkeeping, tax and legal fees
Your bookkeeper, the tax work for the rental, an attorney for a permit dispute or a guest damage claim, and the engineer who performs a cost segregation study.
Only the portion of the fee tied to the rental belongs against the rental. The personal side of your return is not deductible, and some professional fees tied to acquiring or improving the property get added to the property instead of deducted, so send us the invoices rather than a single total.
Rental income reported as a rental activity does not carry self employment tax, so the usual reason to look at an S corp is not present, and holding real estate inside a corporation creates its own problems when you later want to take the property back out. The entity question becomes a tax question when you start managing other owners' properties or providing hotel style services, since that is service income under a different set of rules. Talk to us, your lender and your insurer before moving title.
What to bring us
You do not need all of it to start. Send what you have and your checklist shows what is still open.
- Any 1099-K you received from a platform you host on, plus the annual earnings summary inside your host account, which usually shows gross bookings, host fees, refunds and taxes collected
- Payouts from direct bookings: Stripe or Square records, Zelle, Venmo, checks and cash
- One line per property: address, the date it first went live for guests, and what you paid for it
- The closing statement from the purchase, and from any refinance
- Form 1098 for mortgage interest, the property tax bill, HOA and condo statements, and the insurance declarations page
- A night count per property: nights rented, nights you or family or friends stayed, and days you were there working on the place
- Receipts for furnishings and renovation work with dates, especially anything bought before the first guest checked in
- What you paid cleaners, handymen and co-hosts, with names, addresses and a signed Form W-9 for each
- Lodging, tourist and sales tax registrations and returns, plus what the platform collected versus what you remitted yourself
- Your short term rental permit or license, and your mileage log
What trips people up
Reporting only the money that landed in your bank account.
Your payout is already net of host service fees and sometimes refunds and taxes. Report the gross from the platform summary and deduct the fees, so your return lines up with the 1099-K the IRS also received.
Counting the weekend you stayed there as a rental night.
Track personal nights honestly, including nights you let family or friends stay free or below the going rate. A day you spend substantially full time on repairs and maintenance is generally not a personal day, which is exactly why the log matters.
Deducting the whole pre launch renovation in the year you paid for it.
Work done to get the place ready for the first guest goes into the property's cost and comes back through depreciation. Split the invoices between getting it ready and repairs made after guests started arriving.
Paying the cleaner in cash all year, then chasing a W-9 in January.
Get Form W-9 before the first payment and pay by transfer or check. Whether you have to file Form 1099-NEC depends on whether your rental activity rises to a trade or business, so ask us rather than guessing, and keep the records either way, because thin records are how a real expense gets challenged.
Running the house, the rentals and personal life through one bank account.
One account and one card per property, or at minimum one for all rental activity. Clean records are what let us tie your bank activity to your return without rebuilding the year from memory.
What it costs
Our published list, the same one everyone sees. Prices marked "from" are starting points, and your exact number is confirmed in writing before any work begins.
$0 is due today. You pay when you sign, or you can have your fee come out of your refund, so it can be $0 out of pocket.
Questions we get from your trade
Does my rental go on Schedule E or Schedule C?+
It depends on what you do for guests, not on which platform you list on. Renting furnished space, cleaning between stays and handing over access is generally reported as a rental activity on Schedule E, and rental income reported there is not subject to self employment tax. Providing hotel style services during the stay, such as daily housekeeping, meals, tours or transport, points toward Schedule C, where self employment tax applies. The line between the two turns on your specific facts, so we ask what you actually do for guests before we pick the schedule.
Why is my 1099-K bigger than what Airbnb actually paid me?+
Because it reports gross booking amounts, before the host service fee comes out, and it can include amounts later refunded to guests and taxes the platform collected. The form is not wrong, and reporting only the smaller payout can draw a notice, since the IRS receives a copy of the same form. Report the gross and deduct the fees and refunds, which is why we ask for the annual earnings summary and not only the form.
Can a loss on my rental offset my W-2 income?+
Sometimes, and it turns on your facts rather than on wanting it. Rental losses are generally passive, which means they wait until you have passive income or you dispose of the property. There is a special allowance that lets some owners who actively participate deduct a limited amount of rental loss against other income, and it phases out as income rises. A short average guest stay changes the analysis, because a rental with short average stays is not treated as a rental activity for the passive loss rules, so the question becomes whether you materially participate, and how much of the work a manager does matters to that. It rests on your records of the time you spent, so keep them as you go, and we will tell you plainly what your facts support.
Should I put the property in an LLC?+
That is mostly a liability and lender question, not a tax one. A single member LLC that owns a rental is generally reported the same way you already report it, and it does not create deductions you do not already have. Talk to your insurance agent and your lender before you move title, since a transfer can affect both your loan and your policy.
Can I write off a home office for handling bookings and messages?+
Only if a specific space is used regularly and exclusively for that work. A corner of the living room where the family also watches TV does not qualify, and neither does a guest room that is a guest room part of the year. There is also a separate question of whether your hosting rises to a trade or business at all, so raise it with us rather than assuming either way.
The platform says it collects lodging tax. Am I done?+
Not always. Collection agreements differ by state, county and city, and a platform can cover one layer while another layer stays yours, including registration and filing a return even when nothing is due. Direct bookings are almost always yours to handle. Bring your registrations and we will map which layer belongs to whom.
Let us take the tax part off your plate.
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