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Airbnb 1099: what you need to know to file as a host

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Updated on:
December 12, 2022
December 12, 2022
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Did you Airbnb as a host this year? If so, you are going to need to file Airbnb 1099. It is essential that hosts file their Airbnb 1099 and report all of the income they make on the platform. This article will walk you through the process of filing your Airbnb 1099 with guidance from an experienced accountant.

This post will be the last one you'll ever need. We'll walk you through your quarterly taxes, calculating your self-employed taxes, deductions, and more.

Now, let's talk about the taxes you'll owe as a local host.

Note: if you want to easily handle your AirBNB taxes, try Bonsai Tax. Our app can help you organize expenses, estimate taxes and send you important filing deadline reminders. Our expense tracker feature scans your bank/credit card statements to discover potential tax write-offs you can claim to lower your tax bill. Typically, users save $5,600 from their tax bill. Try Bonsai Tax today for 14 days free.

Taxes You'll Owe As An Airbnb Host

Let's talk taxes. Airbnb hosts are self-employed, and host/rental income is subject to both State and Federal taxation. You'll need to pay self-employment tax or Social Security and Medicare tax on Airbnb income.

You'll owe the self-employment/Social Security and Medicare taxes at a rate of 15.30%, plus State and Federal payroll taxes (if applicable). You'll be able to write off the portion you pay for your taxes.

On top of this, you may need to pay additional sales, occupancy tax, or excise taxes depending on your State's law. AirBNB tells hosts they are fully responsible for being aware of paying taxes they are liable for in a calendar year.

Before you report your taxes, you need to know if AirBnB is already withholding your taxes for you.

Withholding Income For Taxes

Depending on your State's laws, you may not need to worry about withholding your income for taxes.

if you didn't give W-9 taxpayer information on your AirBnB account, then they are required to withhold 24-28% of your income from your taxes and submit it to the IRS. You can discover if they do this by contacting them directly.

You can view your gross earnings and transactions completed in your profile on AirBNB. All transactions recorded or payouts are in your Earnings Summary (net income and gross earnings). You'll be able to see your withholdings or adjustments or gross earnings here as well.

All of this information is useful for income tax reporting.

Quarterly Estimated Taxes

The IRS requires 1099 contractors to pay taxes on their expected tax liability throughout the year or every quarter. To calculate your quarterly tax payments, all you have to do is take the total tax liability from the previous year and divide it by four.

Quarterly Tax Due Dates

  • April 15
  • July 15
  • September 15
  • January 15 of the following year

You can send tax payments through the IRS Direct Pay. Be sure to send in the right amount.

If you underpay, you can receive an underpayment tax penalty.

Save Money Throughout The Year To Pay Your 1099 Taxes

It is important that you save money from every payout in order to pay your quarterly taxes. The majority of accountants recommend you save 30-35% of your income to cover your quarterly tax payments/tax liability for the year.

The IRS 7-day Rule To NOT Report Taxes

A lot of hosts aren't aware of this rule. The IRS does NOT require renters to pay taxes on income received from rentals if:

  • You rent your home for no more than 14 days during the year, and
  • You use the home yourself 14 days or more during the year, or at least 10% of the total days you rent it to others.

This rule applies if you rent out a part of your house or room.

The 1099 Forms You'll Receive As A Host

Depending on how much you earn, transactions, taxpayer information, your State's laws, and how you receive payments, you'll receive two different 1099 forms: the Form 1099-NEC or the 1099-K.

Form 1099-NEC

The 1099-NEC is the most common tax form sent out to freelancers. The 1099-NEC is for reporting non-employee compensation. In 2020, it replaced the 1099-MISC to report this section of the income. The 1099-NEC did not completely replace the form 1099-MISC. The 1099-MISC is just no longer used for nonemployee compensation.

If you received an IRS 1099-MISC instead of the new 1099-NEC, contact AirBNB immediately. If you accidentally filed the wrong form, you'll need to take the steps to void a 1099.

The Internal Revenue Service requirements to receive this form are simple.

If you made more than $600 from one client in the year, then they must send you a form.

Tax Form 1099-K

The IRS 1099-K's requirements are:

  • If you made more than $20,000 in reservations or sales during a calendar year
  • AND you had more than 200 transactions or reservations in a calendar year

If you meet both these requirements, then AirBNB has to send you a Form 1099-K.

However, if you are running your short-term rental business from Massachusetts or Vermont the rules are different. Although you may not have earned $20,000 and produced more than 200 transactions, you'll receive a Form 1099-K if you earned more than $600 from reservations.

If you earned more than $20,000 and processed 200 transactions or more during a tax year through a third-party platform like PayPal, you'll also receive a tax form 1099-K.

In order to avoid being questioned by the IRS, you'll need to report your earnings with the exact amount shown in Box 1a as gross receipts. Access your AirBNB account's Payouts Page under Taxpayer info to locate your 1099-K. You'll typically receive a notification at the end of January when your form is ready.

What To Do If You Don't Receive A Form 1099

The IRS is very unforgiving if you don't file because you lost your 1099 or didn't receive one. There are many reasons why you didn't receive a form 1099 from AirBNB. If you didn't receive a form, but you know you met the reporting requirements, check your account information. You could have incorrectly put in your address so the tax form was sent to the wrong place.

Double or triple-check that you were entered as a business on Airbnb. Simply, sign in to airbnb.com > look for Hosting Preferences under Account Settings to verify the info is set up correctly.

Another reason why hosts may not receive an IRS 1099 is that they earned less than $600. Anyone who has paid someone $600 or more is required to send out a 1099. So, the IRS does not require the platform to send out a 1099 tax form under $600 of payments.

Although you may not receive a form 1099, you still need to report taxes to the Internal Revenue Service.

Tax forms are typically sent out by January 31 by mail or email. If you did not receive a 1099 form after January 31, you can check your account for the AirBNB tax information. Although you can still technically file without a 1099, if the income you recorded is different than the one recorded on your 1099-K or 1099-NEC, your tax return might be flagged for review.

Now that you know what kind of tax forms hosts receive, let's talk about the expenses you can deduct while running your rental business.

Business Expenses You Can Claim As A Host

It is vitally important you keep track of your 1099 expenses and revenue as an AirBNB host.

There is a list of 1099 deductions available to you as a property rental host. Keeping good track of all these business-related expenses can help you lower your tax liability at the end of the year.

  • Hosting fees (you can calculate your deductible fees by looking at your transaction history, You can declare the cost or fees as deductions)
  • A cleaning service you use to maintain your property after a stay
  • Mortgage and property tax can be deducted
  • Utilities
  • Property insurance
  • Advertising related to your business
  • Translation service
  • Local photographer fees
  • You could deduct repairs made to your property from running your business

Be sure to record these receipts for taxes.

Time to File Your AirBNB 1099 Taxes

There you have it. Now you know what to expect when you file your AirBNB taxes.

The important thing is not to forget that AirBN income must be reported as taxable income on the Federal level, and in most cases also at State levels. There are plenty of places where you can go to ask questions like the Community Host Support 2021 AirBNB Inc. AirBNB typically does not give tax advice, but they can provide you with your tax form 1099 information. If you believe you submitted the wrong information, you can still amend a reported 1099.

If you have any questions or concerns about filing your AirBNB tax return, consult a tax professional for advice. The feedback from a tax professional is always advised for assistance with reporting to the IRS.

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