Post by High Priestess on Oct 14, 2015 16:13:50 GMT
Amy shared Oct 14 2015
Taxes
How much should I hold back for taxes? I'm not sure how much I should take out and save for federal taxes. Also, do I have to pay state taxes come tax season as well? I would think that I would have to but everything I see on the airbnb site only mentions federal taxes.
Allison:
You'll want to talk to an accountant who is familiar with the laws in your area. A consultation that covered my questions was free, but I'll pay them to do my tax return this year (first year hosting - want to make sure I've done it right!)
I hold back 30% of my Airbnb income for income taxes (that's a little conservative) and remit a 6% use tax to the state.
Deborah:
Airbnb income is income and you have to pay all the normal taxes on it, both federal and state and local region.
It is pretty simple to figure out how much you will need to pay in taxes. Just take your anticipated Airbnb total income for a year, and then estimate your Airbnb related expenses for one year. PLEASE NOTE that for Airbnb expenses you can deduct the mortgage interest, utilities, property insurance, property taxes in proportion to the amount of space you rent out. SO if you have a 3 bedroom house and rent out 1 bedroom all year to guests, you can deduct 1/3 equals 33.3% of all your home expenses as AIrbnb related expenses.
Take the difference, the net income, and add this to your existing annual net income, eg from your regular job.
Then, take that total income figure, and calculate the tax on it using either an old tax table from form 1040 or the tables on this page:
www.irs.com/articles/2015-federal-tax-rates-personal-exemptions-and-standard-deductions
So for instance if your total taxable income would be $37k to $90k, you would use the figure they give, of $5156 plus 25% of all income over $37k, as your expected tax amount.
(That example is for figuring federal taxes)
Deborah
Taxes
How much should I hold back for taxes? I'm not sure how much I should take out and save for federal taxes. Also, do I have to pay state taxes come tax season as well? I would think that I would have to but everything I see on the airbnb site only mentions federal taxes.
Allison:
You'll want to talk to an accountant who is familiar with the laws in your area. A consultation that covered my questions was free, but I'll pay them to do my tax return this year (first year hosting - want to make sure I've done it right!)
I hold back 30% of my Airbnb income for income taxes (that's a little conservative) and remit a 6% use tax to the state.
Deborah:
Airbnb income is income and you have to pay all the normal taxes on it, both federal and state and local region.
It is pretty simple to figure out how much you will need to pay in taxes. Just take your anticipated Airbnb total income for a year, and then estimate your Airbnb related expenses for one year. PLEASE NOTE that for Airbnb expenses you can deduct the mortgage interest, utilities, property insurance, property taxes in proportion to the amount of space you rent out. SO if you have a 3 bedroom house and rent out 1 bedroom all year to guests, you can deduct 1/3 equals 33.3% of all your home expenses as AIrbnb related expenses.
Take the difference, the net income, and add this to your existing annual net income, eg from your regular job.
Then, take that total income figure, and calculate the tax on it using either an old tax table from form 1040 or the tables on this page:
www.irs.com/articles/2015-federal-tax-rates-personal-exemptions-and-standard-deductions
So for instance if your total taxable income would be $37k to $90k, you would use the figure they give, of $5156 plus 25% of all income over $37k, as your expected tax amount.
(That example is for figuring federal taxes)
Deborah