New tax reporting threshold in USA in Covid relief bill

Tracy652
Level 2
Kingman, AZ

New tax reporting threshold in USA in Covid relief bill

I heard on the news this morning that the tax reporting threshold was changed from $20,000 to $600 in the recently passed Covid relief bill for the so-called gig economy including Airbnb. Does anyone know for sure if this is true.  If true, why has Airbnb not informed us nor publicly fought it?

9 Replies 9
Lorna170
Level 10
Swannanoa, NC

@Tracy652   AirBnB is not going to fight this ruling.  Neither is any other company that employs gig workers and follows the reporting rules.  These companies do not care about when or if you have to report income. They don't even care if you never report it.  They will not be penalized by the IRS if you don't report the income they send you for renting your home.

Maybe they will care when many (including me) decide to drop out or significantly raise prices to stay even. 

@Tracy652 I don't understand why you would have to 'raise your prices to stay even'. Surely nothing has actually changed with respect to your liability for tax. Or are you saying you have been evading taxes until the reporting threshold changed?

@Tracy652  Airbnb doesn't care if you raise your prices or drop out. Why would they? There are more listings than there are guests to fill them and more hosts signing up every day to take your place. 

 

And if all hosts in your country will be having to pay more taxes, then I would imagine all will be upping their prices to cover that. 

 

There is no tax reporting threshhold for many hosts around the world. We pay taxes on our rental income no matter how little money we make. 

Emilia42
Level 10
Orono, ME

@Tracy652 It is true.

https://www.forbes.com/sites/lizfarmer/2021/03/12/federal-stimulus-bill-has-huge-tax-change-for-gig-...

 

It will not start until the 2022 tax year so I imagine Airbnb has plenty of time to make an announcement. But it is really not their concern at all. Aside from getting hosts the 1099 form in a timely matter why would Airbnb care how hosts are filing personal income taxes?

Alan1297
Level 1
Eustis, FL

yes, problematic for people like me- I have one unit I rent, that is co-owned by my partner and I. I manage all the online stuff, so I added with my user account- we never went over the $20k/200 payment threshold before, so never worried all revenue would be reported to me, when I am only 50% owner.  But now I will receive a 1099 if over $600.  So I need to cancel my listing and create a new listing under a "joint account".- I will loose all my reviews and super host status. (you can not change ownership in Airbnb, you must create a new listing).  So any bookings for 2022 that you might get right now will be reported- so clean up your book work before then and if need be, cancel any bookings on listings that are not legally 100% yours.

 

@Alan1297  If the place is co-owned, why not just work out the taxes owed privately between you and your partner, rather than relist and lose all your reviews and Superhost? 

Well all the income would be reported to me.  I would essentially have to issue a 1099 to him to show how the money changed hands.... the money goes in a joint account. But we do our taxes separately and each have separate properties of our own.

 

@Alan1297 You can add multiple taxpayers to one account. No need to start over. 

Account --> Payments and Payouts

 

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