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If you rent your home, or a portion of it, on your own through a vacation rental site like Airbnb, Turnkey or VRBO, the income is treated the same as if you rented the property on your own. You are required to pay taxes on the income generated when the property was rented for more than 14 days in a calendar year.
Rental income includes payment for the use of all or part of your home and other services you provide like meals and laundry. If you rent space for 14 days or less during the year, then you do not have to pay tax on the income.
Which Tax Forms Do You Need?
As a short-term rental host, you may receive Form 1099-K from your host site if you have more than 200 reservations and were paid over $20,000 in a calendar year. You will also receive Form 1099-K if you had backup withholding taken from your payments. Backup withholding occurs when you didn’t furnish your taxpayer identification number, or you furnished an incorrect one. Keep in mind that you may still owe taxes, even if you do not receive a tax form from the host site.
Factoring in Tourist, or Occupancy Tax
Tourist tax – also known as occupancy tax, hotel tax, lodging tax, and room tax - is required from vacationers when they use a rental property. The rates vary by country, state, county, and city. Depending on where you live, you may have to collect and submit the tax yourself. Airbnb and VRBO collect and remits, or submits, the tourist tax for hosts with rental properties in most
What Deductions Can Hosts Claim?
If you rent space for more than 14 days a year and are required to pay taxes, you can claim the cleaning and maintenance costs directly related to the rental and a portion of certain other deductions, including a portion of:
Insurance on your home
Utilities – water, gas, electricity, TV, internet
Mortgage loan interest
Real estate taxes
You may also claim the full expenses for:
Service fees – charged by host sites such as Airbnb
Property repairs related to the rental period – also includes furniture and appliances
You may also be able to claim depreciation, a deduction for property and other assets, on your home. The rules governing rental property can be complicated. Seek professional tax advice to clarify information you may not understand.