I live in NYC and am estimating how much in taxes to put away for income tax time. Right now I am saving 40% of my net income (gross earnings minus expenses like rent). How can I find out what the correct percentage is that I will be taxed? Any other NYC AirBnB hosts that can say how much they were taxed? Or does anyone know the specific tax rates that apply in New York City?
It’s like any 1099 income. They will report you to the IRS… They don’t even snail mail it anymore. You have to pick it up off of your Account profile in January or February.
I’m not an accountant but you should file a Schedule C on your Air income, do a business and write off expenses. If you mean accommodations tax, you should collect it from the guest, not pay it on their behalf.
You’re on point saving 40% of your net income! Many of our NYC Airbnb clients’ have an effective tax rate of 30 - 40% depending on their net income. NYC Airbnb’ers have one of the highest effective tax rates due to the federal tax (10%) + self-employment tax (14.1%) + New York State tax (4.05%) + New York City tax (2.95%) if you are single and made $2,000 in net income in 2014, for example. Also if you had other side income, add another 5% -15%.
Here is the link to the 2014 New York State and New York City tax tables based on your income. The NY State Department of Taxation and Finance has not released the 2015 tables but these tables are the most up to date as of June 2015.