Taxes: Do you handle it yourself or get any help?

[Quincy]

Hello everyone,

Being an Airbnb Host comes with its fair share of rewards and responsibilities. One task that can perhaps be a bit daunting is managing your taxes.

For some, the thought of taking care of taxes can make one feel anxious, and perhaps for others it might be a walk in the park. Chances are that you, as a Host employ an accountant to do your taxes for you, and this way they'll save you precious time and find deductions you may have missed, and ensure you're fully compliant.

So, here's the big question: Do you get help with your taxes or do you handle them yourself?

I look forward to reading your comments!

Quincy

[Eugene209]

I get help

[Quincy]

Hello @Eugene209, thanks for replying! 🙂

What are the costs generally for you to have someone take care of your taxes for you? 

[Brian2738]

Airbnb collects all taxes and distributes them appropriately .

I understand that Airbnb will be sending me a statement yearly. USA Rental

[Mike-And-Jane0]

@Brian2738 Airbnb doesn't deal with income tax except that from this tax year they will be informing the IRS how much revenue you make.

[Lynne496]

They also don't pay bed tax (tourist Development Tax) in many counties, like mine. 

You have to get that from guests yourself in the Resolution Center.  Not sure why they handle it for many counties, but not Palm Beach County, FL.  

[Lorna170]

@Quincy  Too many people seem think that taxes will take care of themselves, especially if AirBnB is collecting and remitting on their behalf.  They also think that they will get some form or statement from AirBnB with that information.  It is amazing how many US hosts are shocked that the 1099 form does not tally with their records as a 1099 shows the gross amount collected for rental of the property, including the service fees charged by AirBnB, all refunds and cancellations which they did not see income from, but AirBnB has to show the intake of payment for.  

Before I began to rent, I talked to a professional and found out what taxes were required to be collected on STRs in my locality.  I also learned the best way to record the income and expenses.

For every booking, I record the income and taxes collected in a simple spreadsheet.  I use the csv files from AirBnB only to validate my records.  Every month I file a tax return with my municipality for the Accommodation taxes.  Every quarter I have to file a tax return with the State for the Sales and Use taxes.  I do this myself utilizing the information from my spreadsheet.   

For my annual federal and state tax returns I send my records to my accountant.  If I had only a single property or a shared room in my home, I could probably do the annual returns myself.  My accountant also reviews the expenses that I have recorded using the categories of the Federal 1040 Schedule E (for those hosts in the US).

It is really just a matter of keeping good records.  

[Christy333]

Hi, @Lorna170 .

wow-this sounds very detailed! I feel super deficient but love your detail and wealth of info.
 I have an Air Bnb in Sylva, with a property manager.  I feel I have been remiss w/the sales and use tax.  I am one of the ones who thought air bnb remitted local and federal.  

[Quincy]

I love the detailed reply here @Lorna170! Indeed, it's important to keep records. Generally, how much time would you spend on this? 

[Lorna170]

@Quincy   I spend 5 minutes per booking to record the details.  I spend an hour each month to verify the tax information for the monthly reports, compile the reports and send the reports.  The quarterly reports take maybe 15 minutes.  It’s all pretty straightforward.  

[Naz488]

True!

[Marlene76]

I get help. I love my CPA, she is brilliant and helps me get my finances in order. That said, she’s not inexpensive, but she is so worth it.

Marlene  

host in Missoula, MT

[Quincy]

Hi @Marlene76, it's great to hear that you have specialist to help you out 🙂 Since when have you been making use of tax services? 

[Marlene76]

I’ve been hiring accountants ever since I started working enough hours where it became a necessity. I’m guessing since 1980. When I was “between” accountants (when I moved to a different state) I worked with a firm that advertised on TV. My best outcomes, however, were the years I hired an accountant from a professional firm. It’s spendy, but so worth it for me; I can sleep at night.

[Laurelle3]

@Quincy we use a a self designed spreadshheet with all expenses and income for the accountant who reviews and submits to fit in with our State and Federal Tax rules.

[Bhavesh6]

Managing taxes as an Airbnb host can indeed be a mix of rewards and responsibilities. Just like phone cases come in various styles and materials to protect and enhance our phones, having an accountant to handle your taxes is like having a sturdy and reliable case to safeguard your financial well-being and ensure smooth compliance.

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