Am a US citizen but I live in in another country year round and rent a room out less than 14 days yearly. Does Airbnb send out my earnings AND the number of days rented to the IRS? Wondering what information they send as I do not have to declare the income to the IRS if rented 14 days or less. Please advise.
They submit a 1099 misc income. They used to mail them but now you have to go to your account and download your own copy. Be aware this is misc self employed income so you will also owe self employment tax…which is very very hefty. Perhaps start saving a portion of your earnings toward tax or consider filing a schedule c with your tax return to be able to deduct expenses. Consult a tax professional to be sure it’s done correctly, (It’s not a statement of the bookings, it’s only the total earnings for the year.)
If it’s under $600 total it is not reported. Anything over that is reported.
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Per the IRS: “There is a special rule if you use a dwelling unit as a personal residence and rent it for fewer than 15 days. In this case, do not report any of the rental income and do not deduct any expenses as rental expenses.”
Airbnb will send you and the IRS a copy of 1099-K if the amount is more than $600. On the 1099-K Line 3, Airbnb provides the number of payment transactions (i.e., the number of guests) but not the number of days your guests stayed.
As such, the IRS will expect for you to pay taxes on your Airbnb earnings. You have two options:
Option #1: Do not report your earnings and expenses. It will automatically trigger a red flag and you will receive a notice. When you do, get the IRS on the phone and explain. When they ask for proof, send them the CSV file from your Airbnb transaction history which shows the number of nights your guests stayed. If you live in another country, this option is inconvenient because you’re automatically going to get a notice in the mail and if you missed it then you could be in trouble.
Option #2: You report your earnings and offset the amount with an expense entry explaining that you fall under the special rules so that your net earnings is $0. You avoid the automatic trigger of not reporting your 1099. You may be selected on a random audit (just like any of us). If your expenses are questioned, then you provide them with your detailed explanation and proof.
If you need an Airbnb tax expert to help you file your taxes this year, drop us a line at hello@getlevee.com or sign up for our mobile app at www.GetLevee.com. We’re completely online/mobile so we can help you anytime, anywhere. Good luck!