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USA tax question, foreign airbnb income, not filing return

#1

hi all, i’m a US citizen but me income for the last few years has been considerably below $10k so i havn’t files a US tax return, as per IRS rules.

now i have some rental income from my property in Thailand going into my US paypal account.

my income is still way below $10k and if it was active income i would continue to not file, not i’m not sure about airbnb passive income.

can anyone tell me, do i have to file, and if the answer is yes, how would i itemize my expenses, since i probably spend more maintaining the place than i get in income anyhow.

thx steve

#2

I’m not a tax lawyer, but I did sleep in an AirBnb last night… I doubt anyone here is tax lawyer enough to help either, although someone who is expert may chime in. If I were you, I’d try to contact a tax attorney — either that or the IRS.

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#3

i’m hoping someone in a similar situation already found out.

#4

Wouldn’t the quickest way to find out @stevethailand would be to call your IRS people and ask them?

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#5

You need to talk to a CPA. it’s possible from what you say that you will not need to file a return.

#6

You grossly underestimate the organization of the US IRS. I had to call once and was on hold for 3hrs​:joy::joy:

#7

CPA here. I’ve got more ideas for ABB tax deductions here You don’t have to file if the sum of your income is below $10,400 - the standard deduction ($6350) + exemption ($4050). If you’re over 65 and receiving social security, that threshold before having to report is higher. Passive income is not tax exempt income so yes airbnb rental income and deductions gets reported on Schedule C (if active) or Schedule E (if passive). If you rented it for less than 15 days the income and deductions are exempt from reporting.

if you own the property you could still have some itemizations on Schedule A. There are other benefits to filing - what if you have a loss that you’d want to carry over into future years to pay less taxes in the future? PM me if you have more questions.

#8

Not much longer, however. I see a steep learning curve for all of us who study the tax code in our near future.

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#9

thanks, so just to be clear, are you saying all my airbnb income (including the first $10,400) must be filed on Schedule E and will be subject to tax from the first $? i will likely get no exemptions at all? thanks

#10

Steve I really don’t know enough about your situation to give you tax advice tailored to you. But for the limited facts I know yes you’d be reporting the whole amount of rental income on Schedule E (assuming it’s passive). You get a $4050 exemption and a $6350 deduction to start with, so the first $10,400 isn’t taxed at all. The dollar after $10,400 gets taxed at the lowest tax bracket depending on your filing status but your other income could change that bracket. Your deductions related to the activity, (i.e. cleaning, see my website for more) would reduce the tax owed.

#11

thanks again, that’s great news, so since i make less than $10400/year on airbnb and i have no other sources of income, i simply file a return with my airbnb income on Schedule E and i should not have any tax liability. is that correct?

#13

Correct. No income tax liability. When you sell it in the future there could be capital gains tax and depreciation recapture (whether or not you claim depreciation). If you need cheap filing let me know I can do it for less than Turbo.

#15

Raf, can you confirm this? I’m really worried. I have self employment income in a different field (I file schedule E for my Airbnb)

This looks scary… is it true?? Or was this the House version? And the Senate version is different?

#16

You’re right @cabinhost for real property it doesn’t matter whether you claimed depreciation or not. As for the active threshold are you referring to the $400 minimum net earnings for self employed filers?

#18

This doesn’t look accurate. I haven’t read the texts of each bill but the main things I’ve heard between the two plans are reducing the corporate tax rate, ACA penalties, repealing AMT, disallowing state and local taxes, as well as doubling the standard deduction and getting rid of the exemptions. None of this has to do with ordinary and necessary business expenses being deductions. There is some possibility that pass through entities could be affected. I’ll post on my my website when I learn more.

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#19

Is it not foreign earned income and should I use form 2555 for my Thai property rented with Airbnb? Or is a schedule e the correct route? I’ve been reporting it as foreign earned income for the past several years… thanks!

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