"Deliver a memorable guest experience while saving big on your taxes."
Renting out your vacant room at home can be a lucrative opportunity to earn additional, attractive income. However, your tax burden might be impacting your business profitability. Managing taxes is one crucial aspect that should be on your radar. You might be providing the most incredible experience to your guests, but your Airbnb business might be on the downfall! Ever wonder why? You might feel stuck due to the ineffective management of taxes. You may be missing tax deductions that can help you save big bucks on your taxes and boost your business profits. As an Airbnb host, you must pay income taxes for freelance workers if you rent out your home, apartment, or vacant room for more than 14 days in a year. Let's look at some of the available tax deductions!
Tax Deductions for Airbnb Tax Preparation and Reporting in 2024 to Skyrocket Your Income
Airbnb hosts can deduct certain expenses if they rent out their personal or second residence for more than 15 days in a particular year. So, here is a quick checklist of the short-term rental tax deductions for Airbnb tax preparation and reporting that you can claim to maximize your tax savings in 2024:
Depreciation
You can claim a portion of the cost that you incur on your rental property by getting a depreciation deduction. According to the IRS, you can depreciate your property if you meet the following conditions:
The Airbnb host should be the legitimate owner of the property.
You are using the property for your Airbnb business or income-generating activities.
Your property has a useful life that you can accurately estimate.
You can expect the property to last for more than one year.
You can only make a deduction for the part of the property that you use for renting purposes.
Appliances, Furniture, and Household Supplies
In a particular situation where you're using your property only for business, you can claim a full deduction for the amount you spend on furnishing your short-term rental property, including appliances, furniture, and household supplies. However, you can get a deduction for a percentage of the cost if you or your family stay on the property for a while.
Cleaning or Maintenance Fees
Supplies and fees for cleaning, maintenance, repair, and routine use come under ordinary and necessary costs for your Airbnb rental property. Some deductions include cleaning supplies, cleaner costs or wages paid, and maintenance fees to contractors.
Airbnb Tax Preparation Tips to Claim Airbnb Tax Deductions in 2024
Based on their tax filing situation, an Airbnb host can claim tax deductions with these Airbnb tax preparation tips in mind:
The terms 'personal residence' and 'rental property' have different tax implications. The IRS considers it a personal residence if you use your property for more than 14 days, or more than 10% of the total days that you rent it out.
If you do not use the property for personal use, you can deduct 100% of the expenses related to the property. If you use your property for personal use, then you have to remove part of the mortgage interest and property taxes from either Schedule E or Schedule C, and place it as an itemized deduction.
Save Big on Your Taxes with Agro Accounting CPA's Tax Preparation for Freelancers!
Let your Airbnb business reach new heights of success with expert tax preparation for freelancers from Agro Accounting CPA. Our tax professionals can create effective tax strategies to claim your tax deductions and reduce your tax burden. Take the first step towards your Airbnb business growth with agroaccounting.com!
