- What expenses can an Airbnb host deduct on their taxes?
- How do I calculate what percentage of my home expenses are deductible?
- Can I deduct the Airbnb host fee (service fee)?
- How does depreciation work for a short-term rental property?
- What's the difference between a deductible repair and a capitalized improvement?
- Can I deduct furniture, linens, and amenities I bought for guests?
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Check my rental tax situation — free →Frequently asked questions
Can I deduct the Airbnb host fee on my taxes?
Yes. The Airbnb host service fee — typically 3% of the booking subtotal — is a fully deductible rental expense. It is taken directly from your payout, so it is effectively pre-deducted, but you should still track it as a deductible expense on your Schedule E. Your Airbnb year-end income summary shows total host fees paid, which you can use as your deduction amount.
How do I calculate the deductible percentage of my home expenses?
For a property used both personally and as a rental, use this formula: rental days ÷ (rental days + personal use days). If you rented 90 days and personally used the property 30 days, your rental-use percentage is 75% (90 ÷ 120). Apply this percentage to mortgage interest, property taxes, utilities, insurance, and similar shared expenses. The rental portion goes on Schedule E; the personal portion of mortgage interest and property taxes may be deductible on Schedule A.
Can I deduct furniture, appliances, and linens I bought for my Airbnb?
Yes. Furniture, appliances, mattresses, linens, and similar personal property used in the rental are deductible — either as immediate expenses under Section 179 (up to $1,160,000 in 2023, with income limits) or depreciated over 5 years under MACRS. The $2,500 safe harbor per invoice item also allows smaller items to be expensed immediately. Items used both personally and for rental guests must be allocated by rental-use percentage.
What is the difference between a repair and an improvement for tax purposes?
Repairs restore the property to working condition and are deducted in full in the year paid. Examples: fixing a broken pipe, repainting, replacing a broken appliance like-for-like. Improvements add value, extend useful life, or adapt the property for a new use — they must be capitalized and depreciated over 27.5 years (for the building) or 5–15 years (for components). The IRS's $2,500 per-item safe harbor allows smaller routine replacements to be expensed rather than capitalized.
Can I deduct depreciation on a property I also live in?
Yes, but only on the rental-use portion. Calculate your rental-use percentage (rental days ÷ total days used), then apply that percentage to the depreciable basis of the property. Important: all depreciation you claim — even on a partially-used property — must be recaptured and taxed as ordinary income when you sell, even if the sale qualifies for the §121 home sale exclusion. Keep a running record of depreciation taken each year.
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