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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?
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?
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
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.”
Yeah, I had a similar thing happen with a broken window once. Airbnb’s system isn’t great at separating reimbursements from actual income. From what I understand, you don’t pay income tax on reimbursements since they’re just covering a loss.
I was kinda being tongue-in-cheek, as this administration seems to be axing things as quickly as possible, that have far-reaching consequences, and a domino effect, that people don’t even foresee.
Airbnb is required by most tax jurisdictions to report any moneys paid out. In United States, these payouts are reported to the IRS in the form of a 1099-K and they are classified as “Gross” income, which will include any resolution adjustments. It is then your job to deduct any expenses including any costs to repair directly on your tax forms. Also keep in mind that Airbnb purposfully does not subtract their Service Fees or Refunds from the Gross Income reported on the 1099-K, which means it is also your job to track these amounts and deduct them directly on your tax forms as well.
Thanx, JJD. You are correct. I was intending that more for hosts to do the opposite…if they want their cleaner to get $200 (and they don’t do the direct payout through Airbnb, instead of paying them separately) that they would need to charge a cleaning fee of $206.19 to break even.
