If you are providing substantial services and operating your rental property similar to a hotel, then you are considered by the IRS to be running your own business and must file a Schedule C (and pay those dreaded Self-Employment taxes). So how do you know whether to report your AirBnb income on a Schedule E or Schedule C? Basically it depends on whether or not you are considered a real estate professional. You will need to pay these taxes when you bring in more than $400 each year.įor 2020, self-employment has an Airbnb tax rate of 15.3% for the first 92.35% of your income from self-employment.
This is because you are responsible for paying your Social Security and Medicare taxes, as these aren’t automatically deducted by a business that is overseeing your payment. Self-employment taxes come in addition to income taxes. When you run your own business or work as an independent contractor, you will have to pay both income taxes and self-employment taxes. If you do not, however, this may be new to you. If you already freelance elsewhere or run a business of your own, you may be familiar with self-employment taxes. For Schedule C however, any income you report would be subject to self-employment tax. The good news is that you can deduct rental expenses on either of these schedules. You have two options of how to report this income to the IRS – either on a Schedule C or Schedule E. If you rent out your property for more than 14 days, you need to report the income you earned.
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