Can I deduct occupancy taxes on my short-term rental?

 

It's important to understand three things about occupancy taxes as a short-term rental host.

1) Sites like Airbnb may already be collecting and paying occupancy taxes on your behalf. You cannot claim a deduction for occupancy taxes Airbnb collects and pays on your behalf.

That said, while Airbnb collects occupancy taxes in many popular cities, it does not collect taxes in all cities in which they are owed. You can find out if collection has already been taken care of for you by checking for your city on this page. Occupancy taxes you pay on behalf of your guests are absolutely deductible

2) Even though occupancy taxes are intended to be paid for by the rental guest, the burden to remit (send) these to local tax authorities sits with you, the rental host. If you find that your state or city does require that you charge and pay occupancy taxes, and that Airbnb wasn't doing so for you, then you can typically pay those taxes directly to your local tax office, without amending your tax return.

3) Occupancy taxes vary from one region to next, and can be collected at the city, county and state level. Be sure to check your local regulations to make sure you're in accordance. I would search for "occupancy tax" on your state and local tax office's website, to see what the requirement there is.

If you want to claim those occupancy taxes as a deduction on a tax return that you already filed, then you would need to amend your tax return so that you can include those taxes as a deduction. You can read more about the process of amending your tax return here. If you previously filed taxes with a tax filing software, you can likely handle the amending process from your same account.


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