Do You Have to Pay Taxes on Airbnb Income?

Income generated from renting a property through platforms like Airbnb is generally subject to taxation. This article explains what counts as taxable earnings, the types of taxes you might owe, deductible expenses, and how to report your Airbnb income.

Understanding Your Taxable Airbnb Income

All gross rental income from your Airbnb activity typically constitutes taxable income. This includes nightly rates, cleaning fees, guest service fees, and other charges passed on to guests. The total amount received forms the basis for your taxable income calculation.

The distinction between personal use and rental use days significantly affects tax treatment. A specific rule, often called the “14-day rule,” provides an exception: if you rent your property for 14 days or fewer during the tax year and also use it for personal purposes, the rental income might not be taxable. In such cases, associated expenses are generally not deductible. However, if the rental period exceeds 14 days, all gross rental income becomes taxable.

Applicable Taxes on Airbnb Earnings

Income from Airbnb hosting can be subject to several types of taxes, depending on the services provided. Federal income tax is a primary consideration, where Airbnb income is typically categorized as either rental income or self-employment income. The classification depends on whether you provide “substantial services” to your guests.

If you provide minimal services, such as furnishing the property and basic maintenance, your income is generally considered passive rental income. This income is not typically subject to self-employment tax. However, if you offer substantial services that go beyond basic lodging, such as daily cleaning, providing meals, or concierge services, your activity may be classified as a business.

When substantial services are provided, the income is usually considered self-employment income. This income is then subject to self-employment tax, which covers Social Security and Medicare contributions. The self-employment tax rate is 15.3%, consisting of a 12.4% Social Security tax component and a 2.9% Medicare tax component.

Beyond federal taxes, state and local taxes can also apply. Many jurisdictions levy transient occupancy taxes (TOT), often called lodging taxes, hotel taxes, or tourist taxes, on short-term rentals. These taxes are collected from guests and are distinct from income taxes, being remitted to state and local governments. Airbnb has agreements in some areas to collect and remit these taxes on behalf of hosts, which simplifies the process. However, hosts must confirm local requirements and ensure compliance, as Airbnb may not collect all applicable local taxes in every jurisdiction.

Deductible Expenses for Airbnb Hosts

Hosts can reduce their taxable Airbnb income by deducting eligible expenses. Maintaining accurate records and receipts for all expenditures is important for substantiating these deductions.

Deductible expenses include:
Prorated expenses like mortgage interest and property taxes, based on the percentage of time the property is rented out.
Utilities, including electricity, gas, water, and internet services, typically prorated for rental use.
Cleaning and maintenance costs, such as professional cleaning services or cleaning supplies.
Repairs and minor improvements made to the property.
Insurance premiums.
Supplies provided for guests, such as toiletries, linens, or kitchen essentials.
Airbnb service fees and commissions.
Depreciation of the property’s value and its furnishings.
Advertising and marketing costs.
Professional fees for services like tax preparation.

Reporting Your Airbnb Income

Reporting Airbnb income accurately involves understanding which forms to use. For rental activities that do not involve substantial services, income and expenses are typically reported on Schedule E (Form 1040, Supplemental Income and Loss). If your Airbnb activity is considered a business due to the provision of substantial services, you would generally report your income and expenses on Schedule C (Form 1040, Profit or Loss from Business). The choice of form depends on the IRS’s classification of your rental activity.

Airbnb is generally required to issue Form 1099-K to hosts who meet certain reporting thresholds. For 2025, the threshold for receiving a Form 1099-K is $20,000 in gross payments and 200 transactions. If your gross payments from Airbnb exceed $20,000 and you have 200 or more transactions, you should receive this form.

All income from your Airbnb activity must be reported on your tax return, even if you do not receive a Form 1099-K. Since taxes are not typically withheld from Airbnb earnings, hosts with significant rental income or self-employment income may be required to make estimated tax payments throughout the year using Form 1040-ES. This ensures that tax obligations are met as income is earned, avoiding potential penalties at tax filing time.