Tax form includes damage reimbursement money

Hi,

Last year, I had guests damage the floor of the room in which they were staying. I filed a complaint with airbnb and they reimbursed me for the repair costs.

Now, when I look at the 2024 earnings summary, it includes the reimbursement money that was paid by Airbnb as part of the annual earnings.

That’s not my ‘earnings’, since that money was for repair costs.

Has anyone else had this issue? Will be filing taxes soon and need to figure out how to remove the reimbursement amount from the actual earnings.

Is there a way Airbnb can keep the reimbursement amount separate from the earnings in the ‘earnings summary’ document?

Thanks.

Airbnb has to report all the money they paid out to you regardless of what it was “for” so that’s why it’s in your earnings and it can’t be recategorized so that it isn’t in your earnings because it is indeed part of your earnings.

In the simplest sense, you only have two kinds of money related to renting out your Airbnb: 1) earnings and 2) expenses. The money does not get labeled, earmarked or reconciled by Airbnb (or anyone else) because that is done when you file your taxes. Report your total earnings and then deduct your total expenses and it works out.

In your case, report your earnings from your summary and then make sure to deduct what you actually paid (e.g. this is the amount on your receipt(s) and without any regard to what Airbnb gave you for it) to have the floor repaired along with your other expenses (cleaning supplies, linens, snacks, etc).

It’s no different than dealing with cleaning fees. If you charge cleaning fees they will also be included in your total earnings but you don’t need to worry about them being called cleaning fees or even how much you actually collected in cleaning fees. You simply report your total earnings which includes the cleaning fees paid out to you by Airbnb then deduct your actual cleaning expenses (that number may or may not be the same as what you collected but it doesn’t matter - I only mention this because some people pass on the exact cleaning fee directly to their cleaners but some people pay cleaners a different amount or do the cleaning themselves and only deduct for the cleaning supplies). It’s all reconciled on your taxes as either earnings (any money paid to you) or expenses (money you paid out).

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Thanks for the detailed reply.

I’ve never deducted expenses (like cleaning fees) from the airbnb earnings…do you know if (in the US), you need to setup a business in order to deduct expenses, or can you do it/have you done it, without setting up an official business account?

Thanks.

@rain, @Jdd gave you some great information there.

I’d suggest that you need to consult your own accountant about your own individual situation.

Information from online forums can be great but in legal/accountancy matters, it’s best to consult the experts.

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Hi Rain,
that’s not actually true. You do not need to formally setup a business. You can and should deduct your expenses on your taxes. You are allowed to deduct the a percentage of all expenses that apply to the home (including landscaping, maintenance, cleaning supplies, basically everything that you buy to maintain or upgrade your home) based on the number of nights you rent your house out. TurboTax walks you through it and makes sure you file the correct form or if you use a CPA they should know this. You deduct it on a Schedule E (Form 1040), Supplemental Income and Loss. TurboTax will do all the math. You can also deduct the entire amount of expenses that apply ONLY to the STR, like the repair you had to do because of your guest or cleaning between guests and snacks/coffee you buy just for guests and don’t forget any transient lodging taxes you pay yourself (AirBnB collects state of Oregon TL taxes but not our county and city TL taxes. I have to submit those myself). This will greatly reduce your tax bill and it is totally legal. Here’s the link to the IRS website that speaks to STRs. Topic no. 415, Renting residential and vacation property | Internal Revenue Service

Thanks…that’s helpful to know. I also use Turbo Tax, so will try to find a way to deduct the expenses.

Better do it quick- TurboTax may not be available any day now.

“Musk tweeted Monday that he had “deleted” a government agency that worked on a free online system for filing 2024 tax returns directly with the IRS — although for now the software appears to remain available. Companies including H&R Block and TurboTax are seeking to protect their multibillion-dollar industry, which sees the average U.S. taxpayer spend $140 a year on tax preparation.”

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