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Airbnb and short term rental hosts
Self-employment tax depends on whether your Airbnb income goes on Schedule E or Schedule C, and the IRS can ask why a later return changed schedule. We place the property on the schedule that matches your services, reconcile the 1099-K, allocate personal use and file the return, federal and state.
Placed on the schedule that matches the services you provide, with the reasoning documented
The 1099-K reconciled to what the platform paid out to you, so the return and the form agree
Occupancy and state registrations checked for each property, whichever platform remits
A host who provides landlord services reports on Schedule E and pays no self-employment tax; a host who provides hotel services reports on Schedule C and does.
What moves you across is the level of service you provide during the stay, not your nightly rate, your guest count or how many properties you own.
The platform reports gross bookings on the 1099-K, before its fees and your payouts, so the figure is larger than what you received and has to be reconciled on the return.
Tell us how the property is run and we will place it, at no charge and before any engagement letter.
| Schedule E | Schedule C | |
|---|---|---|
| You rent the space and little else | You run something closer to a hotel | |
| Services | cleaning between guests, utilities, wifi | daily housekeeping, meals, concierge, tours |
| Self-employment tax | no | yes, on the profit |
| Treated as | rental income | a trade or business |
The level of service you provide during the stay decides the column, not nightly rate, guest count or how many properties you own.
A host who cleans between guests, supplies linen, pays the utilities and provides wifi is doing what a landlord does, and reports on Schedule E.
A host who provides daily housekeeping during the stay, meals, a concierge, transport or organized activities is doing what a hotel does. Enough of those and the activity is a trade or business reported on Schedule C, with self-employment tax on the profit.
The schedule is decided separately from the passive activity tests. We record which services you provide and why the schedule follows, so the position is on file if the IRS asks.
Schedule E or C, decided on the services you provide and documented.
Gross bookings reconciled to your payouts, so the return and the form agree.
Rental and personal days counted under Publication 527 and expenses split.
Lodging and tourist tax registrations checked, whoever remits.
Filed where the property is, which can differ from where you live.
Built or checked, with a cost segregation referral where a study pays.
Where you also stay in the property, expenses are split between rental days and personal days under Publication 527. Days a family member stays, days let below a fair rate and days swapped with another owner all count as personal days.
Past the threshold the property is treated as a home, deductions are capped at the rental income and no loss is available. We count the days from your calendar and booking data before the allocation is made.
Let the place for fewer than 15 days in the year and, if you use it as a residence, the income is not reported and nothing is deducted against it. The planning use of that rule is covered on our Augusta rule and section 280A page.
States, counties and cities levy occupancy, lodging and tourist taxes. Some platforms collect and remit some of them in some jurisdictions, and the registration obligation can remain with the owner regardless. State income tax on the rental is filed where the property is, whichever state you live in. We check both for each property.
How the property is run, how much you use it yourself, and which states are involved.
Schedule E or C decided on your services and documented for the file.
The 1099-K, expenses and the personal use allocation tied to the return.
Federal and state returns filed, occupancy registrations checked for each property.
The first return is where the schedule is decided, and we get it right once.
Personal days counted and the allocation done before deductions are claimed.
One return set, with each property placed and each state filed.
Priced on the returns and schedules your facts produce. What we quote against:
These are the factors, not a quote.
150,000+ returns prepared and filed
Licensed CPAs and Enrolled Agents on every return
Fixed quote agreed before work starts
"The least appealing answer is probably the right one."
"This is the 6th year I have worked with Dimov Tax Specialists… I always feel confident in my final returns which include out of state rental properties."
Our team includes CPAs and Enrolled Agents who work on individual returns, business taxes and tax planning. Tell us what you need help with when you get in touch.
A later change of schedule is a question the IRS can ask about, so the first return is the one to get right. Tell us how the property is run, how much you use it yourself, and which states are involved.
General information rather than advice for your circumstances. Outcomes depend on facts specific to you, so speak to a CPA before acting on it.
