Short-Term Rental Tax Deductions: What You Need to Know

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As a rental property owner, you can reduce your expenses and increase your profits from your real estate investment by taking tax deductions. Deductions reduce your taxable income by designating part of your income as having been spent on qualifying business expenses. You can also take deductions for expenses you incur to produce more income from your Airbnb or short-term rental property.

Short-Term Rental Tax Deductions: What You Need to Know

So, what kind of tax deductions can you take for your short-term rental property the next time you file your taxes? Here are some of the most common:

  • Agent fees and services—You can deduct expenses for any service you used to facilitate your rental business, such as hiring a property management company to collect rent for you.
  • Property maintenance and repairs—One of the main expenses for your short-term rental are likely related to repairs and maintenance to keep it in good condition. Most of your repair and maintenance expenses are tax deductible, and they can include the cost of furnishing the rental, replacing windows, buying cleaning supplies, laundry costs, or any other expense related to maintaining your rental.
  • Marketing and advertising—Any funding you put toward publicizing your short-term rental can be deducted on your taxes.
  • Utility costs—As long as your rental agreement does not require your tenant to pay for Wi-Fi, gas bills, water, or electricity, you can deduct utility costs for your rental on your taxes.
  • Insurance—You can add any insurance premiums you pay to protect your rental property to your list of applicable tax deductions.
  • Local service costs—Do you pay someone to plow the snow, clean the pool, or maintain the garden at your short-term rental? You can deduct all these expenses on your taxes.
  • The mortgage on the property—Any interest you pay on the mortgage for your short-term rental can be deducted from your taxes.

Throughout the year, keep a record of these expenses to make sure you can deduct as much as possible from your taxes when you file. As a result, you can make your short-term rental investment even more profitable than you planned on.