17 Airbnb, VRBO, and HomeAway Rental Host Tax Deductions
As a rental host, you can save hundreds (even thousands!) of dollars at tax time by deducting business expenses. That’s because every time you write off an expense, you lower your taxable income – putting the money you spend on your business back in your pocket.
A Few Things to Keep in Mind
When it comes to deducting business expenses, there are certain regulations you need to follow:
Business expenses must be both ordinary (commonly accepted in your trade) and necessary (helpful and appropriate for your business). The expenses we list below fall into this category.
The IRS requires documentation of any business expense you deduct. That’s why it’s so important to track your expenses during the year. If you didn’t track your expenses last year, don’t worry; our guide shows you how to retroactively find deductible expenses.
Because there’s always a chance you may be audited, save your business receipts for at least three years after you file your taxes.
Rental Host Tax Deductions
If you’re a host, here are 17 deductible expenses you should keep track of throughout the year:
1. Mileage: Keep track of all your business-related trips! While there are lots of ways to do this (like taking odometer readings before and after trips), the easiest way is to use an app like Stride Tax that records mileage while you drive:
To your rental properties to do repairs, maintenance, or cleaning
On work-related errands, such as picking up cleaning supplies
If you choose to take the standard mileage deduction, keep in mind that you cannot deduct individual vehicle expenses like gas, oil changes, car repairs, and car insurance.
2. Home Office: The IRS keeps a close eye on this deduction, so make sure you only write off your office if it’s a dedicated home workspace used solely and regularly for your rental business.
Have a home office? You can write it off with either:
The simplified option: Multiply the square footage of your office (up to 300 square feet) by the standard rate of $5.
The actual expense method: Add up the expenditures related to your home office, including:
Direct expenses, such as supplies for and repairs to your office. You can deduct these in full.
Indirect expenses, like your mortgage, insurance, and utilities. You’ll divide the total cost of these expenses by the percentage of your home that’s used for business.
3. Cell Phone Bills: Do you use your phone exclusively for business? You can fully deduct related expenses (including the phone purchase and monthly bills). If you also use your phone for personal reasons, you should only deduct the portion used for business. The best way to do this is to calculate what percentage of your calls were work-related and then claim that percentage of your bill.
4. Business Cards: Designing and printing business cards is a deductible marketing expense.
5. Printing and Copying: Keep your receipt anytime you print or copy work-related materials like marketing flyers, brochures, and office records. Print jobs are deductible!
6. Office Supplies: Items that you buy for everyday office use, like pens, paper, postage, and notepads, are all deductible. Good news: you can still write these off even if you take the simplified home office deduction!
7. Professional Development: Any learning you do that helps you with your rental business, like classes, seminars, conventions, or trade shows, is deductible.
8. Advertising: When you promote your listings, keep track of how much you spend! Online ads, signs, print ads, videos, website hosting fees, and more are all deductible.
9. Cleaning and Maintenance Fees: You can write off any expenses for laundry, cleaning supplies, professional cleaning services, and maintenance costs.
10. Property Insurance and Private Mortgage Insurance: You can deduct premiums for any insurance plan, including private mortgage insurance (PMI), that covers your rental properties. If you prepay your PMI premiums for multiple years, you can only deduct the portion that applies to the year you’re paying taxes for.
11. Utilities: All utility bills for your rental properties are deductible, including:
12. Furniture, linens, and food: Keep track of the expenses you spend to provide accommodations and amenities for your guests. You can deduct the furniture, linens, curtains, shower supplies, and food that you provide to your guests.
13. Repairs: You can write off repairs made to your rental property, including repairs to furniture and appliances.
14. Mortgage Loan Interest: There are new limits to how much of your mortgage interest you can deduct for your own primary and secondary residences. However, these limits do not extend to rental businesses, so if you have a mortgage on your rental properties, you can deduct all of the interest.
15. Major Improvements: If you have a property that’s used for rental more than 50 percent of the time, look into Section 179 of the tax code. New updates allow rental business owners to write off the cost of fire and security systems, roofs, and HVACS up to $1 million.
16. Guest or Host Service Fees: Short-term rental companies like Airbnb typically take a small percentage from your rental fee. You can deduct 100 percent of these guest / host service fees as long as you’ve rented out your home or apartment for more than 14 days of the year. Rental companies will send you a 1099 form with your annual earnings and will include the total service fees.
17. Health Insurance: As long as you’re self-employed and you don’t get health insurance via a spouse or employer, you can deduct 100 percent of your monthly premiums. Keep in mind that if you receive a government subsidy, you can only write off the amount you pay each month (not the original price of your plan). Note: your health insurance premiums are taken as a personal deduction on Form 1040, NOT deducted as a business expense.
Some Common Expenses You Can’t Deduct
The IRS deems some common expenses as non-deductible. These include:
Personal hygiene expenses, like haircuts, clothing that can be reasonably worn outside of work, and dry cleaning (unless it’s for a uniform)
Legal violation fees, like parking tickets or court fees
Commuting mileage if you work at a permanent office away from home
Life insurance premiums when you are the beneficiary, even if you take the policy out to secure a business loan
An Easy Way to Track Your Expenses
Have you tried our free expense tracker? Stride Tax is an app that makes it simpler than ever to find deductible expenses, take pictures of receipts, and automatically record business mileage.