Hi Lawrence, if your Airbnb space is only ine part of the total square footage of the home, make a diagram that shows the total square footage living space and the part that is allocated to Airbnb, or just measure and write down the figures. A diagram is very handy as reference when you or your accountant do your taxes. You come up with a proportion of Airbnb square footage divided by Total square footage living area, that's A.
Make a note of the date the Airbnb was put in service. For the rest of the year, you can figure out the number of days occupied divided by the number of days total, that's B.
Keep very good track of expenses, both those 100% for the Airbnb, and shared expenses such as internet, water, and electric bill, yard maintenance, or what have you.
Shared expenses can be allocated to the Airbnb as "A x B x total shared expense = the amount you deduct from rental income" or in some other way that seems reasonable (but best to check with an accountant). Just be consistent for each expense, you may feel that the water should be split in some different way for example, if there are 6 guests at a time. be sure you have a method that you can easily stick to, and keep good records.
!00% Airbnb expenses like furnishings, sheets, towels, cleaning supplies, etc, are another Total to be deducted from rental income.
If in USA: At the end of the year, if you show a loss, more expenses than income, you can only count it as a loss if you did not use the space yourself for personal use for more than 14 days (this is called Vacation Rules by the IRS I believe).
For your capital expenses, that comes into play when/if you sell the house (assuming you are in the USA, it could be different otherwise). It will be important to know what proportion of your home was used for short term rentals (or any rentals for that matter) for what proportion of time, and that will affect the Capital Gains exclusion you can claim.
Basically, you need to keep good records. You can download your transactions from Airbnb.com from time to time as an Excell spreadsheet, and it will show the number of nights, the cleaning fee, the total earned, the service fees paid, and other details. I find that to be very helpful.
The best way to get great service with Airbnb is to become a Superhost, check it out in the Airbnb helpfiles, https://www.airbnb.com/superhost. Never cancel a reservation unless you are sure there are extenuating circumstances; always check your messages and reply to requests and inquiries; get great reviews by paying attention to detail, paying attention to your guests' needs, and thinking from the guest's point of view how the space should best be set up and furnished; and be very honest in your listing description. Superhosts get a dedicated helpline that's often faster than normal channels, but depending where you are, the customer service should be fine anyway.
You need to do due dilligence and know how the system works.
Great article:
https://community.withairbnb.com/t5/Hosting/A-Host-s-guide-to-Airbnb-60-tips/m-p/409261#M101034
Help guides:
https://community.withairbnb.com/t5/Help/Community-Help-Guides/m-p/23100/highlight/true#M311
This help file from Airbnb has links to many essential articles that you may find helpful as a new host: https://www.airbnb.com/help/topic/207/listing-your-place
Airbnb help files can lag a little behind changes. There is not much in them about using the app at the moment. Sometimes they are incomplete, inaccurate or confusing, but there is a place to give feedback, and the articles are constantly being improved.
Make sure you know what you are getting into by reading whatever you can to understand the parameters, and by asking questions here.
All the best, Neti