By Placerr — Your Place, Managed Better.
Disclaimer: Placerr is not an accountant, CPA, tax attorney, or financial advisor. The information in this article is for educational purposes only and is not tax, financial, or legal advice. Always consult a licensed tax professional before making decisions related to deductions, depreciation, or business filings.
Starting an Airbnb or short-term rental business is exciting—and expensive. After purchasing the property, furnishing it, and preparing it for guests, many new hosts are surprised to learn just how many tax benefits STR owners can take advantage of.
Whether you are a brand-new owner-host or already operating your listing, the right tax strategy can significantly reduce your taxable income and improve your overall return on investment.
This guide explains the most common deductions and strategies Airbnb hosts use, what qualifies, and how to prepare before the year ends.
1. Depreciation: One of the Most Powerful STR Tax Benefits
If your Airbnb qualifies as a business, you can depreciate the property itself.
Depreciation allows you to deduct a portion of your property’s value each year as it “wears down.”
For residential rental property, the IRS uses a 27.5-year schedule.
Items that may qualify for depreciation include:
- The structure (building value only, not the land)
- Appliances
- Furniture
- Flooring
- HVAC
- Roof
- Water heaters
- Improvements and renovations
Bonus Depreciation (if applicable)
Certain items may qualify for bonus depreciation, allowing you to deduct a large portion in the first year. Many hosts use cost segregation studies to break down assets into shorter depreciation timelines.
Again—consult a professional before using this strategy.
2. Deductible Operating Expenses
Most day-to-day Airbnb business expenses are tax-deductible. These may include:
- Cleaning and turnover costs
- Supplies and toiletries
- Repairs and maintenance
- Property management or co-hosting fees
- Laundry services
- Utilities (if you pay them)
- Internet and streaming services
- Insurance
- Booking platform fees (Airbnb, VRBO, Booking.com)
- Smart locks, cameras (exterior), tech devices
- Subscriptions (pricing tools, channel managers, software)
If it is necessary for the business, it may be deductible.
3. Furnishing Your Airbnb: What You Can Write Off
STR hosts can typically deduct furnishings and decor, including:
- Beds, sofas, tables, chairs
- Mattresses and bedding
- TVs and entertainment equipment
- Lamps and lighting
- Kitchenware and small appliances
- Artwork and decor
Depending on the price and classification, items may be:
- Fully deductible in the first year, or
- Depreciated over multiple years
Your accountant will advise the best method.
4. Travel and Mileage for Business Purposes
If you travel to your property to:
- Perform maintenance
- Meet with contractors
- Purchase supplies
- Conduct inspections
- Manage business operations
You may be able to deduct:
- Mileage
- Travel expenses
- Parking and tolls
If the trip is mixed personal and business, only the business portion is deductible.
5. Home Office Deduction (If Applicable)
If you run your Airbnb operations from a dedicated section of your home, you may qualify for a home office deduction.
The space must be:
- Regularly used
- Exclusively for managing your STR
This deduction is often overlooked but can reduce taxes significantly.
6. STR-Specific Tax Rules: A Quick Breakdown
Short-term rentals operate under different rules than long-term properties. Some STRs may qualify as:
- Passive income
- Active income
- A business
- A hotel-like activity
The classification affects:
- Deductions
- Depreciation
- Loss limitations
- Self-employment tax
This is one of the most important conversations to have with your CPA.
7. The “14-Day Rule” (A Unique Loophole)
If you rent your home for 14 days or fewer per year, AND you use it personally the rest of the time:
- Rental income is tax-free
- You can still deduct certain expenses
This is powerful for high-end rentals near major events.
8. Year-End Strategies for New Airbnb Hosts
Before the year closes, STR owners often consider:
A. Prepaying expenses
If you pay for services early (cleaning contracts, management fees, supplies), it may count toward the current tax year.
B. Purchasing deductible items
Furniture, appliances, linens, or tech upgrades purchased before Dec 31 may be deductible this year.
C. Completing repairs
Repairs done before year-end may result in immediate deductions.
D. Scheduling a cost segregation study
This can dramatically accelerate depreciation, especially for new property purchases.
E. Reviewing your bookkeeping
Keep receipts, invoices, and logs organized before filing.
9. Why Proper Documentation Matters
The IRS requires proof of expenses and depreciation. Keep:
- Photos
- Receipts
- Contracts
- Invoices
- Mileage logs
- Cleaning records
- Check-in/check-out timestamps
Good documentation protects your deductions and speeds up audit responses.
Placerr helps owners keep organized turnover records and property documentation, which supports both insurance and tax compliance.
10. How Placerr Helps With Your STR Operations (Non-Tax Service)
While Placerr does not provide tax advice, our system makes it easier to track and manage the types of documentation your CPA may ask for, including:
- Cleaning and turnover records
- Damage reports
- Maintenance logs
- Inventory management
- Operational expenses
- OTA fees and revenue statements
- Consistent documentation of property condition
These operational records help owners stay compliant and organized.
Final Thoughts
Starting an Airbnb or STR can come with powerful tax benefits—including depreciation, deductions, and year-end strategies—but every situation is different. The right structure can significantly increase your net profit, while the wrong strategy can lead to unexpected tax burdens.
The key is understanding your options early and consulting a qualified tax professional who specializes in real estate and STRs.
Clean operation records, organized expenses, and proper documentation make the entire process smoother—and Placerr can support you with the operational side of your hosting business.
Disclaimer
This article is for educational purposes only. Placerr does not provide tax, legal, or financial advice. Always consult a certified tax professional or CPA for guidance specific to your situation.
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Email: hello@placerr.com
Website: www.placerr.com
Placerr — Your Place, Managed Better.
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