Accounting

[Pam2286]

Question for other hosts in the US.

Do you hire an accountant to handle taxes?

We created an single owner LLC and placed our STR under the LLC.  All income and expenses related to the STR run through dedicated bank accounts under the LLC.

For tax prep, do you use an accountant, or does a tax platform like Intuit make it easy enough to file your taxes.

[Mike-And-Jane0]

@Pam2286 we use an excel spreadsheet and then file electronically with HMRC. If I had my time again though I might have a professional do the first years accounts so that I can check are not missing any tricks. I don't think we are though as we effectively pay no tax through judicious use of pension contributions.

[Jason114]

Hi @Pam2286, I run an accounting firm and I usually recommend hosts find a local accountant to at least help them set up their accounting strategy to get them on the right foot. But it sounds like you've already made some very smart decisions. Setting up an LLC for your short-term rental operations is a great move.. it provides personal legal liability protection and helps establish your Airbnb as a true business. Having a dedicated bank account under the LLC is also key, as it keeps your business finances separate from your personal ones, which is important for tax purposes.

Using a spreadsheet to track your Airbnb income and expenses is better than nothing, but as things grow.. especially if you have multiple listings, expense categories, or local tax obligations.. it's much easier and more accurate to use accounting software like QuickBooks Online (https://quickbooks.intuit.com/) or Xero. These platforms give you a clear financial picture, simplify tax filing, and make it easier to work with your CPA.

To automate the Airbnb side of bookkeeping, I usually recommend Tallybreeze (https://www.tallybreeze.com/). Tallybreeze connects Airbnb directly to QuickBooks or Xero, providing complete control and automatically syncing reservation payouts, Airbnb service fees, cleaning fees, and tax allocations. You can also connect Vrbo. Tallybreeze essentially handles the data entry for you, so you don't have to manually record each reservation/payout or risk overlooking deducting service fees, adjustments or refunds.

I also recommend using Hubdoc to automatically scan and categorize receipts into your accounting platform. It saves time and keeps your expense documentation organized in your accounting software for tax season.

Lastly, if your single-member LLC is a disregarded entity, the IRS treats it the same as a sole proprietorship for tax purposes. That means all your income and expenses will be reported on Schedule C of your personal tax return. This setup is perfectly fine and very common among short-term rental hosts, but as you grow you may consider S-Corp status for your LLC which has greater options to save on self-employment taxes among other benefits.

Anyways... go over all of the above with a good local accountant who can help you confirm what strategy works best for you. Either way, you're off to a great start!

Cheers!