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US Airbnb- Question- Tax Write offs

Hi Everyone,

I am a new house, started this year on the Jersey shore. I have had some great guests and (knock on wood) my experience has been pretty good to this point. Overall I have made a little more then 3500 bucks from my reservations. My question (and concern) is tax season. Since we get a 1099 we are fall into the bucket of an independent contractor which means we can write off business expenses. I was wondering what and if you guys are writing thing off. I was think of keeping receipts for paper good (paper towels, toilet paper, ect) as well as cleaning supplies. Just thought maybe you guys can help and share what you are writing off also.

Thanks and looking forward to being part of this community.

Personally, my CPA told me it couldn’t be written off as a business and had to be taken as a regular rental-of-your-home deduction. (Because I didn’t meet the criteria of a real bed and breakfast with maid service and all that…

Some have suggested incorporating as an LLC in order to do that.

There was a group of CPAs posting here who specialized in vacation rentals and Airs. They are at @Levee_App.

Be sure to look at all options. We have heard some hosts had trouble refinancing because mortgage giants Fannie and Freddie don’t want to see you using their properties in a commercial way and this will show up on your tax returns if you do a schedule c! Possibilities are that they could void your mortgage ??? And you would have to refinance it as a commercial one?!! Look into this… as we have heard about it!

(Btw, starting this year Air stopped sending out 1099s if you were under 20k in bookings.)

Hi Konacoconutz,

Thanks for the reply!!! I will definitely be under that 20k mark so if I am reading it correctly… As long as I am under 20k I will not receive a 1099? I did Uber for years so I was able to write of mileage and such for that. I am surprised it is not the same. I live in my unit usually all year I am actually taking advantage of the location on the shore and my place is definitely seasonal (3 to 4 months at most). Definitely appreciate the insight and will take that into consideration. I have been thinking about seeing a CPA very soon as I do a lot of 1099 work as I am a realtor, uber drive, and now airbnb host.
Best Regards to you Kona!!

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I’m also curious about the level of write-offs. I moved into my home at the beginning of this year and have done some improvements such as refinishing the bathroom tub, replacing old windows, buying the bedroom for Airbnb guests, and patio set and grill which I offer to my guests. Are all of these deductible? The guests do use all of this things and figured I could write off 50% of all of them and 100% of the stuff in the bedroom. I just rent out the spare bedroom and live in the other one.

I met with my CPA this week to make sure I am compliant and ready to rent in Portland, OR.

I obtained a permit to do short term rentals (in which I am required to live on premises 270 days a year), a business license and am considered a sole proprietor. Since I am self employed and run a business from my home, there are many deductions I will claim for supplies, depreciation of furniture, phone, etc.

See this information to about sole proprietors:

https://ttlc.intuit.com/questions/2834868-if-sole-proprietorship-is-only-for-rental-property-do-we-report-rental-income-on-schedule-e-or-schedule-c-if-we-use-both-c-e-what-should-be-reported-on-each-schedule.

One must still report our earnings of course!!! :smile:

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Apparently it is QUITE the grey area!!!

Some CPAs let you take a Schedule C and others advise Schedule E! There are pros and cons for both I would imagine… such as that it shows up on your returns should you want to refinance! That is Yuge… as they say in Vermont!!

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I should also add that my situation is unique. We own a large house that is mixed use zoning (small portion is my commercial tattoo shop in front and the rest is my residence). In my situation to refinance I would need a commercial refinance anyway due to my mixed use zoning (currently residential mortgage). I will be doing schedule c as advised by my tax professionals. Anyone doing Airbnb or other STRs should get the tax/business/city/state requirements nailed down before ever listing in my opinion.

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In my area there is no City tax rules for home sharing. I have looked extensively. Their rental rules are geared for long term which I can not even use as I would have to put tenants name in there and declare that is not my primary residence which it is. Mind you I am in NJ

Actually, in 2015 Airbnb only sent 1099s to hosts who made over $20,000.00 and hosted over 200 reservations. Here is the wording in the email I received:

Based on new information from the IRS, Form 1099-Ks are provided to hosts who have earned over $20,000 and hosted over 200 reservations in 2015. Since you won’t be receiving a tax form, please use the 2015 Airbnb Earnings Summary to report your Airbnb income.

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Exactly! Every other year hence, I received a 1099 no matter how small the amount.

I actually have done two webinars with an accountant explaining the different taxes and write off.

We do them every year because stuff changes. Like in 2016 we didn’t get a 1099 unless you had over 200 bookings and made 20k

You can read it here:

Airbnb & Taxes

A couple of points: An LLC is not a corporation. Unless you opt otherwise it is a pass-through entity ignored for tax purposes (but subject to franchise tax by the state: $800 in Calif as far as I know; less elsewhere). If you are renting a property or a part of a property, or using it as a business office (for example) then you need to depreciate it. If you set up your AirBnB rental as a business through a taxable entity or report as Schedule C then you have payroll tax (FICA, CPP/QPP, UK NIC) or Self Employment Tax to contend with. If you perhaps need additional quarters of coverage/years of contributions that’s no bad thing. But for most, it’s just more tax. Your accountant should be able to guide you. I

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