Rental Income & Airbnb Taxes: What the IRS Expects from You

Earning money by renting out a room, a vacation home, or an entire property on sites like Airbnb is a popular idea. But this new income also comes with new tax rules. The IRS has specific guidelines for reporting rental income and deducting related costs, and understanding these can prevent stress at tax time.

At Khob Tax, we focus on providing clear, accurate, and quick tax help for your specific financial situation, including rental properties. Our experienced professionals stay up-to-date on the latest tax laws, working with you to find every possible deduction and credit. This helps you get the most out of your income and reduces your worries.

Reporting Your Rental Income

The IRS considers money you make from renting a property to be taxable. The amount and type of income you report depends on how long and how often you rent the property.

• Renting for 14 days or less: If you rent out your property for 14 days or less during the year, the money you earn is usually not taxable, and you don’t have to report it.
• Renting for more than 14 days: If you rent your property for more than 14 days and use it for personal reasons for 14 days or less, you must report all of your rental income. The good news is, you can also deduct all of your rental expenses.
• Mixed-use property: If you use the property for both personal and rental purposes, you will need to split the costs between the two uses. The IRS has specific rules for how to do this.

Deducting Your Rental Expenses

A major benefit of being a landlord or Airbnb host is being able to deduct costs related to your rental activity. These deductions can greatly lower the amount of income you have to pay taxes on. Common deductible expenses include:

• Mortgage interest: The part of your mortgage interest that is for the rental period.
• Property taxes: The taxes you pay on the rental property.
• Utilities: Costs for electricity, gas, water, and internet during the rental period.
• Insurance: Payments for fire, liability, and other insurance on the property.
• Maintenance and repairs: Costs to keep the property in good shape, such as painting, fixing a leaky faucet, or lawn care.
• Depreciation: This is a deduction for the wear and tear on your property over time.

How Khob Tax Can Help

Dealing with the tax rules for rental income can be tricky, especially with personal use, splitting costs, and depreciation. Our team at Khob Tax has a lot of experience with rental real estate income and expense reporting, including filling out Schedule E.

Our Expertise Includes:

• Rental Real Estate Income and Expense Reporting: We’ll help you correctly report your rental income and make sure you claim every deduction you’re allowed.
• Full Tax Filing Services: We handle returns for all 50 states, making sure you follow both federal and state rules.
• Expert Advice: We offer one-on-one meetings to understand your unique situation and provide solutions made just for you.

Don’t let the details of rental property taxes stress you out. Rely on Khob Tax to provide accurate and quick tax preparation. This will help you get the most from your income and reach your financial goals.

Ready to make tax season easier?

Contact Khob Tax today at 510-742-1419 or Schedule a Consultation to get started with our full range of services.

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