How does receiving income from Air BnB affect ability to receive or maintain Unemployment Benefits (California)? Does it matter if I have AirBnb just take out the 30% or not?
You are not an employee and cannot ask them to do that. You will receive a 1099 statement from AirBnB at the end of the year, reporting your entire earnings total to the IRS. (Like a self-employed subcontractor gets).
You should be ready to file a Schedule C (business expenses) with your tax return or pay a LOT OF taxes. Put 40% away toward taxes if you expect a lot of revenue or you will be in trouble at tax time.
If you are on unemployment, I would imagine you have to report this income on your UE forms. Not doing so could get you in trouble also because the IRS will see everything, as will the state. Call your CPA to get clear on these matters…
I once collected UE benefits morethan 30 years ago when I lived in California. As I recall, they want to see all the income you are making. If he is going to run his air room as a Schedule C business, he needs to keep receipts for his expenses so he has write offs. Otherwise he will owe the straight tax.
Even if he does not report his income now on his UE benefits form, it may all come out in the wash when Air sends his 1099 at the end of the year and he has to file his taxes.
I think a lot of new and inexperienced hosts don’t understand the 1099 or that they are going to receive one at all from Air.
Here’s what Air has to say about the 1099:
What tax forms should I expect to receive from Airbnb?
Hosts who have filled out a W-9 form will receive form 1099-K showing
their earnings for the year, and hosts with US sourced earnings who have
filled out a W-8 form will be provided form 1042-S. If you did not
receive a tax form, please make sure to review how taxes work for hosts to see if you should expect a form. If you think you’ve submitted the wrong information, you can also make changes to taxpayer information you’ve already submitted.
1099 Forms
Delivery. Any 1099 forms we issue to you will be available in your Payout Preferences.
You’ll receive an email notification when your form is ready, typically
in late January of each year. We also mail a copy to the address you
provided along with your taxpayer information, unless you opted for
electronic delivery only.
Receiving multiple 1099s. You may receive both a 1099-K and a 1099-MISC form if you are both a host and an Airbnb service provider. You may also receive more than one 1099-K form if your taxpayer information is listed on multiple Airbnb accounts.
1099-K. In previous years, we issued 1099-MISC forms
to hosts. Starting with the 2013 tax year, we’re sending 1099-K forms
instead. This shouldn’t change the way you file your taxes. As always,
we encourage you to consult a tax professional for assistance reporting
your income.
1042-S Forms
Delivery. The IRS requires that we mail 1042-S forms
by the end of March. You’ll receive a 1042-S form in the mail at the
address you entered when you submitted your tax information.