Do I need to pay tax on my Airbnb income?

Yes. The IRS considers Airbnb income taxable. You must report it on your federal tax return, along with any applicable state or local taxes.

What expenses can I deduct as an Airbnb host?

You can usually deduct:

• Mortgage interest or rent

• Utilities, internet, and cleaning fees

• Repairs and maintenance

• Depreciation of the property

• Airbnb service fees

  The deduction depends on whether the property is fully rented, partially rented, or mixed use.

Do I have to pay self-employment tax on Airbnb income?

It depends. If you provide substantial services (like daily cleaning, meals, or guided tours), the IRS may treat your rental activity like a business, subject to self-employment tax. If you just rent the property with minimal services, it’s usually treated as rental income, not subject to SE tax.

What records should I keep?

Keep all receipts, invoices, and detailed logs of income and expenses. For mixed-use properties (personal + rental), keep records of days rented vs. personal use. This affects your deductions.

How is depreciation handled for short-term rentals?

If the property qualifies as a rental, you can depreciate the building (not the land) over 27.5 years for residential, or 39 years if commercial. Short-term rentals often qualify for residential, but classification depends on use.

Do I need to collect sales or lodging taxes?

Yes, in many cities and states, Airbnb hosts must collect local occupancy or lodging taxes. Sometimes Airbnb collects and remits these automatically, but not everywhere. Always check your local rules.

If I only rent part of the year, do I still report it?

Yes. Even if you rent for just a few weeks, you must report the income and expenses. However, if you rent for fewer than 15 days in a year, the IRS allows you to exclude that income entirely (the “Masters exemption”).

What if I have an LLC for my rental property?

An LLC doesn’t change the taxation unless you elect corporate treatment. Income usually flows through to your personal tax return, but an LLC may provide liability protection.

Do foreign investors in U.S. property pay U.S. taxes?

Yes. Foreign owners must file U.S. tax returns for rental income and may be subject to withholding. FIRPTA also applies on sales of U.S. real estate.

Can I use losses from my Airbnb against other income?

Sometimes. Rental losses are usually passive and limited, but active participants with income under certain thresholds may deduct up to $25,000 of losses. Real estate professionals can use larger losses. If you materially participate in a short-term rental that averages 7 days or less per customer stay, the IRS may treat it as a business activity instead of passive, which can open the door to using losses against other income.