Three Tax Tips for Airbnb Rentals

If you own an Airbnb rental, the way you pay taxes is a bit different. You can be a private homeowner, but when you list the home on Airbnb as a vacation rental, or a single room alone, you must claim any income made. In this article we will cover some of the basics of Airbnb ownership from a tax perspective.airbnbpic

14-Day Rule

If you do not rent your property for more than 14 days out of an entire tax year, you do not have to claim the income on taxes. If you use the rental yourself for 14 days or 10-percent of the days it is available for rent, you do not have to claim taxes on the short-term rental.

Record Business Expenses

If you spend money on repairing or improving the rental, you can claim some of those expenses as business expenses. This helps reduce your tax liability. It is important to view the rules regarding what is tax deductible for Airbnb rental owners.

Mortgage Interest on Rented Rooms Only

If you rent a room and not the whole home for 14-days or more, you only pay taxes on the rental income from that room. You will also only be able to deduct business expenses for amounts spent on that room. Mortgage interest and property taxes are 100-percent deductible.

Closing Thoughts

Rather than attempting to figure the taxes on your Airbnb rental out by yourself, hire an accountant to do it for you. Your accountant will separate expenses and determine which credits or deductions you qualify for. This helps prevent mistakes and audits.

Image credit: Viaggio Routard