Taxes: how much should I estimate?

Answered!
Emily1
Level 1
Seattle, Washington, United States

Taxes: how much should I estimate?

I've been splitting Airbnb earnings with my roommate. She's moving out at the end of December. When I go to file my taxes by April 15th, I'll be responsible for all the taxes since she obviously won't be there. Therefor, I wanted to know if anyone has an idea about how much I should estimate the goverment will take out for taxes. 10%? 30%? Some other amount?

 

Take this hypothetical situation: If I made $1,000 from Airbnb and taxes were 10% that would be $100. I would then charge my roommate half of that $100 ($50) before she moves out.

 

Am I on the right track? Thoughts? Advice?

 

 

1 Best Answer
Stephanie
Community Manager
Community Manager
London, United Kingdom

This content is in our Archive board.

 

You can still access it if you have the link but it won't appear when you search the Community Center.

 

To ask a new question in the Community Center, please click:

 

Stephanie_0-1677152405466.png

 

 

Thanks

-----

 

Please follow the Community Guidelines 

View Best Answer in original post

6 Replies 6
Lizzie
Former Community Manager
Former Community Manager
London, United Kingdom

Hello @Emily1, good to meet you. 

 

Are there any hosts who might have any tips on how to calculate this?


--------------------


Thank you for the last 7 years, find out more in my Personal Update.


Looking to contact our Support Team, for details...take a look at the Community Help Guides.

Derek0
Level 2
Los Angeles, CA

Hey there,

 

There are a ton of great resources here: www.SharedEconomyCPA.com - let me know if you have any follow-up questions.

Deborah0
Level 10
California, United States

Hi Emily

First of all, you need to calculate your actual net income from Airbnb.  If you make $1000 from Airbnb, you also will have expenses you can deduct from that.  First, make sure you deduct the 3% fee Airbnb takes from hosts -- because when they report your income to the IRS, they do not deduct that. You have to deduct it as an expense.  Then, other expenses are, utilities, a portion of your rent, and any supplies you purchase for guest's use, etc.  You would need to keep receipts for all those expenses. Then figure your net income.  

 

The amount of taxes that you will need to pay on your Airbnb income, depends upon how much other income you earn during the year.  Your Airbnb income is added to your other income, to create a total income figure.  Then you will pay tax based on the tax rate for that income level.  So, your tax on your Airbnb income is totally dependent upon your other income -- and same for your roommate.  

 

Here's a website that has tax brackets showing on it.:

http://www.efile.com/tax-service/tax-calculator/tax-brackets/

 

and:

http://www.forbes.com/sites/kellyphillipserb/2013/10/31/irs-announces-2014-tax-brackets-standard-ded...

 

 

So for instance, if your other income was $35,000, and your AIrbnb income was $500, your total income would be $35,500 and you would have to first deduct the standard deductions that IRS allows, which change each year.  For instance, in 2014 the standard deduction is about $6200 and the personal exemption is about $3900.  So together, about $10,000.  THat means that your taxable income is then about $25,500.  The tax rate on that income level is about 15%.  

 

You should consult a tax preparer to make sure you take all the deductions you are allowed to take, to minimize your taxes, and to get help doing the taxes if you aren't comfortable doing it yourself.  

 

Really great info there Deborah thank you!

Hhh

Stephanie
Community Manager
Community Manager
London, United Kingdom

This content is in our Archive board.

 

You can still access it if you have the link but it won't appear when you search the Community Center.

 

To ask a new question in the Community Center, please click:

 

Stephanie_0-1677152405466.png

 

 

Thanks

-----

 

Please follow the Community Guidelines