Taxes

[Sean30]

Airbnb is not being transparent and on top of that they are taking a cut of the taxes we need to pay.

 This seems illegal to me - be deceptive on pricing (don't show the taxes then ask for it later from the guest) or show higher prices and pay Airbnb a fee inclusive of the taxes and then you as the host are screwed each time you rent.

Why can't they add a separate line item for taxes and we input the rate just like VRBO -and take no fee from that amount-  this may be the thing that kicks me off this site - this feels slimy and makes me think airbnb has deceptive business practices.  

[Christina147]

Airbnb told me that they collect the Occupancy tax from the guest before hand and send it to Florida for you.  So you are just repsonsible for your own income tax and State tax I am assuming???

[Michael470]

My question is how do we know how much they are paying the state. I do not understand why they dont just  collect the amount in full. It is very difficult to collect tax after they arrive.

[Amy57]

Airbnb says they are going to collect taxes beginning June 1. Are they collecting taxes on future guests that booked before June 1 or are they only collecting on new bookings moving forward?

[Clare0]

@Amy57 It would have to be for reservations confirmed on June 1 and thereafter since any reservations made before June 1 they wouldn't be able to collect the taxes.  For example, if someone made a reservation on April 10 for August 10, they couldn't retroactively collect the taxes.  The payment date is the key, not the reservation date. 

Hope this helps!

[Norman1]

I agree, Airbnb is not being open and transpearant on the web site. They automatically  collect taxes in some areas, such as Mecklenburg, NC. But do not make the amount obvious to the host. They also have not shown how much of that collected goes to each government entity or when it is paid to each government (local, state federal, county, etc). All of this is necessary for each of us to file a return. Does 100% of the collected tax money go to paying taxes? Or do they skim some off of the top for 'collection fees' or some other excuse.

Lastly, current laws do not require people who rent their home for less than 14 days to pay federal income tax! Yet Airbnb still collects it!! This is wrong!

[Clare0]

@Norman1 I wasn't aware that Airbnb does any Federal income tax witholding except for those hosts who have not provided a tax ID.  I believe this is a requirement from the IRS.

[James43]

Your are correct. I just checked the tax page for hosts and they don't withold federal tax unless you haven't given your tax info.

[David376]

He said "pay income tax"--meaning he thinks we're actually exampe from federal income tax??

[Allison2]

He's right - you're exempt if you rent your primary residence for less than 15 days - you don't report any income or expenses.

https://www.irs.gov/taxtopics/tc415.html

(toward the bottom)

[James43]

This is sort of off the topic, but it's still tax related. I have a question about the following statement from Airbnb regarding federal taxes for us hosts in the U.S.:

"At the end of January, we will provide hosts who've earned over $20,000 and had 200+ reservations with a Form 1099-K showing their reportable earnings from the previous year."

My question is, if I make less than $20,000 and have fewer than 200 reservations and they won't send me a 1099; will they still report the income to the IRS? I threw caution to the wind this past tax year and didn't report my Airbnb earnings, but now I'm wondering if I'm going to get caught! Anyone have any information on this issue? Thanks!

[Clare0]

@James43 Well, do you feel lucky?  No, Airbnb didn't send information to the IRS if you didn't meet the threshold requirements for a 1099K.  Are you still required to report your Airbnb income? Yes.  Keep in mind that all your earnings are readily available on Airbnb.  Will you get caught?  Who knows?  A random audit could do the trick. 

Knowingly not reporting income to the IRS could be considered tax evasion, I'm sure.  As far as I know, there is no statute of limitations on that. 

Good luck!

[David376]

Wait--why are we exempt from federal income tax?

[Merry-Lee0]

Airbnb only collects taxes in cities/states where they have had to sign an agreement to do so with that city/state in return for approval to do business within that city/state.  This may also be a result of some owners not paying the taxes to which the government felt entitled.  We owners in Vermont got a series of emails from Airbnb warning us that they would begin collecting taxes this month.  Our advertised rental rates had included Vermont's 9% Meals and Rooms tax, which was well noted on our listing.  But on Oct 1, we reduced the advertised rental rates to exclude that tax and must now depend on Airbnb to do it.  I only wish they would add taxes and their service fee openly as a line item that both owners and potential guests can see, thus allowing us owners to discuss it intelligently with our potential guests.

[David376]

Claire, I appreciate your going ahead and answering this--this was exactly my question (I just noticed they're doing this in Los Angeles starting August 1, and I already have solid bookings for August and September), but did you just use logic or did you see something from AirBnB that said this?  Or is this personal experience when they started doing it with you?

[David376]

Amy, can I get a follow-up on how it worked for you? I just noticed that they are going to be doing this August 1 where I am, so the question is what about the people who already booked for September, etc.?  Does the AirBnB agreement exempt them?