Learn the Airbnb tax advice essentials that can help you be well prepared for tax time.
If you’re a new Airbnb host, you may be worried about how to pay your taxes for your Airbnb business. After all, taxes do cause a lot of anxiety among business owners. If they aren’t done right, the consequences can be extreme. It’s best to be prepared before the taxman comes calling. Below are a few considerations to be aware of before you begin your Airbnb hosting journey.
At Hosty, we’ve been in the game for awhile, so we know what you need to get started. We may provide professional Airbnb management software, but we’re also Airbnb hosts ourselves. Despite all of our knowledge, we’re not legally certified to provide you with Airbnb tax advice. If you have a specific question, it’s best to take it to a professional.
Airbnb Tax Strategy
Plan: Before you begin hosting, talk to your accountant. They’ll explain to you the types of things that you need to know before becoming an Airbnb host. They’ll help you better understand how to pay your quarterly taxes and what you can write off to save some money. Checking in with them first is a great way to start off strong. If you don’t have an accountant yet and just want some more information, check out this post on taxes
Pro tip: You may also need to check with your insurance provider to make sure your home has the proper insurance to keep your Airbnb guests safe.
Separate bank accounts:
One of the most straightforward ways to accurately track your revenue and expenses and prepare you for tax time is to open a dedicated business bank account. This way, you won’t have to try to remember if your most recent purchase at the home repair shop was for you or your Airbnb. When everything is separate it becomes much easier to organize. This also makes it significantly simpler when filing your taxes, saving you both time and money while keeping your accountant very, very happy.
Having a separate bank account is a great start, but there are still a few more things that you’ll have to do in order to be prepared for when your Airbnb taxes come due. You’ll need to save the receipts for each business purchase that you make. It sounds a little tedious, but it is important. Make it a habit; remember to get a receipt at the time of purchase and to file it shortly after. Use a mobile app specifically designed for this. Being diligent in keeping and filing receipts now, make it so much easier at the end of the year.
At the most this post will inspire you to become a certified accountant. At the lease, we hope it provides you with enough Airbnb tax advice to get you started. Having good practices from the beginning will ensure your success for years to come.