General info on doing federal taxes for Airbnb in the US
Dec 21, 2015 19:02:08 GMT
Olivier François likes this
Post by High Priestess on Dec 21, 2015 19:02:08 GMT
HEre is some general info on how to do your Airbnb taxes if you live or host in the US:
First, it used to be the case that all hosts will get a 1099 form from Airbnb that reports to you and the IRS your total gross income from Airbnb. THis is no longer the case -- Airbnb has gone to a new process and they no longer file 1099's for every host. Now they file 1099-K forms, but only for hosts who both received over $20,000 in income, AND who had 200 or more bookings in a given year. (see this IRS page for more info on that: www.irs.gov/Businesses/Understanding-Your-1099-K and tinyurl.com/gvu2h8d )
If you do get a 1099-K form: It's very important to note that Airbnb does NOT deduct from your gross income, the 3% host service fee that they keep from all your bookings. So you have to deduct that. In addition, Airbnb does not deduct any of the refunds you have given guests which were done through AIrbnb (of course it doesn't incude any refunds you gave to guests directly either). So you need to deduct those.
So for instance say you were paid $2000 from Airbnb for all your bookings in 2015, and say you refunded one guest $200, so you would have earned $2200 prior to the refund you gave to the guest.
THus, when you get a 1099-K form from Airbnb, it will report that you earned a total of $2266. Airbnb includes as income to you, the refund you gave to the guest, as well as the 3% fee on the $2200, or $66, that Airbnb held back from your payments. So you have to deduct the $266 on the federal income tax form.
Expenses: you want to make sure to deduct the right amount of expenses. You can deduct the proportion of your rent or mortgage interest, as well as your utilities and supplies expenses, which correlate to the amount of space you rented out in your home. THe way the IRS figures it, if you have a 3 bedroom home and you rent out 1 bedroom full time, (eg, you rent out that bedroom 365 days a year) then regardless of the size of each bedroom (that is not material), you would be able to deduct 33% of all your utilities, supplies commonly used, and rent or mortgage interest, as expenses. This includes electricity, gas, water, garbage,internet service, cable TV, as well as things like dish soap, paper products.
If you rent out one bedroom but not full time, you can only deduct the % of expenses that correlate for the time you rent it out. So let's say you rented out that one bedroom (out of 3 total bedrooms you have in your house) for 56 days during the year. THen you could deduct 56/365 X 1/3 = 15.3% X 1/3 = 5.1% of all expenses on utilities, supplies and/or your rent or mortage interest, as expenses. The 1/3 factor is because you have 3 bedrooms total in your house and only one is being rented out. THe maximum you would be able to deduct for expenses, if you have a 3 bedroom home and rent out 1 bedroom, is 33% of expenses, and you could only deduct that much if you rent it out full time. NOw there does seem to be some disagreement on this issue of how often the room is rented out -- some are saying that if the guest room is always available for guests, even if it is not rented out full time, then you can still deduct expenses as if it had been rented out full time. For clarification on this point, check with an accountant.
Any expenses that you had for the guest room only or for the guests only, would be 100% deductible. SO let's say if you spent $40 on shampoo and soap for guests, during the year, then that is 100% deductible. Or if you had to purchase furniture for the guest room, that is 100% deductible.
How to file your taxes: you can use either Schedule C or Schedule E to report your Airbnb income. THere is some information on how to decide which of those to use, here: globalhosting.freeforums.net/thread/30/taxes-webinar-evelyn
First, it used to be the case that all hosts will get a 1099 form from Airbnb that reports to you and the IRS your total gross income from Airbnb. THis is no longer the case -- Airbnb has gone to a new process and they no longer file 1099's for every host. Now they file 1099-K forms, but only for hosts who both received over $20,000 in income, AND who had 200 or more bookings in a given year. (see this IRS page for more info on that: www.irs.gov/Businesses/Understanding-Your-1099-K and tinyurl.com/gvu2h8d )
If you do get a 1099-K form: It's very important to note that Airbnb does NOT deduct from your gross income, the 3% host service fee that they keep from all your bookings. So you have to deduct that. In addition, Airbnb does not deduct any of the refunds you have given guests which were done through AIrbnb (of course it doesn't incude any refunds you gave to guests directly either). So you need to deduct those.
So for instance say you were paid $2000 from Airbnb for all your bookings in 2015, and say you refunded one guest $200, so you would have earned $2200 prior to the refund you gave to the guest.
THus, when you get a 1099-K form from Airbnb, it will report that you earned a total of $2266. Airbnb includes as income to you, the refund you gave to the guest, as well as the 3% fee on the $2200, or $66, that Airbnb held back from your payments. So you have to deduct the $266 on the federal income tax form.
Expenses: you want to make sure to deduct the right amount of expenses. You can deduct the proportion of your rent or mortgage interest, as well as your utilities and supplies expenses, which correlate to the amount of space you rented out in your home. THe way the IRS figures it, if you have a 3 bedroom home and you rent out 1 bedroom full time, (eg, you rent out that bedroom 365 days a year) then regardless of the size of each bedroom (that is not material), you would be able to deduct 33% of all your utilities, supplies commonly used, and rent or mortgage interest, as expenses. This includes electricity, gas, water, garbage,internet service, cable TV, as well as things like dish soap, paper products.
If you rent out one bedroom but not full time, you can only deduct the % of expenses that correlate for the time you rent it out. So let's say you rented out that one bedroom (out of 3 total bedrooms you have in your house) for 56 days during the year. THen you could deduct 56/365 X 1/3 = 15.3% X 1/3 = 5.1% of all expenses on utilities, supplies and/or your rent or mortage interest, as expenses. The 1/3 factor is because you have 3 bedrooms total in your house and only one is being rented out. THe maximum you would be able to deduct for expenses, if you have a 3 bedroom home and rent out 1 bedroom, is 33% of expenses, and you could only deduct that much if you rent it out full time. NOw there does seem to be some disagreement on this issue of how often the room is rented out -- some are saying that if the guest room is always available for guests, even if it is not rented out full time, then you can still deduct expenses as if it had been rented out full time. For clarification on this point, check with an accountant.
Any expenses that you had for the guest room only or for the guests only, would be 100% deductible. SO let's say if you spent $40 on shampoo and soap for guests, during the year, then that is 100% deductible. Or if you had to purchase furniture for the guest room, that is 100% deductible.
How to file your taxes: you can use either Schedule C or Schedule E to report your Airbnb income. THere is some information on how to decide which of those to use, here: globalhosting.freeforums.net/thread/30/taxes-webinar-evelyn
