More and more Americans are turning to the rental property market to earn extra income. About 10.6 million people in the U.S are earning rental income in this manner. Of those, about 4 million people are using the property rental site Airbnb ( (ABNB) – Get Airbnb Inc. Report). How much are they making renting property? According to iProperty Management, the average Airbnb host earns about $9,600 annually.
Renting out your property has tax implications. The IRS does tax most rental property income, of course, there are tax deductions for things like rental property depreciation.
Watch the video above. TheStreet’s Robert Powell discusses what is tax-deductible and more with Jeffrey Levine, CPA and nationally recognized thought-leader within the financial planning community.
Our TurboTax Live experts look out for you. Expert help your way: get help as you go, or hand your taxes off. You can talk live to tax experts online for unlimited answers and advice OR, have a dedicated tax expert do your taxes for you, so you can be confident in your tax return. Enjoy up to an additional $20 off when you get started with TurboTax Live.
Recommended Read: Tax Deductions for Rental Property Depreciation
Quotes| Rent Your Home Tax-Free With This Overlooked Tax Exception Jeffrey Levine, Chief Planning Officer, Buckingham Strategic Wealth Jeffrey Levine, Chief Planning Officer, Buckingham Strategic WealthQ & A| Video Transcript:Robert Powell: Welcome to TheStreet’s tax tips with Jeffrey Levine from Buckingham Wealth Partners. Jeffrey, when we talk about tax tips for 2022, many folks are renting out their home or parts of their home as an Airbnb. What do they need to know about recording their income and expenses?
Jeffrey Levine: Well, I think the first thing is, is this your primary residence, or is this a secondary residence, is this is a true rental property? If you’re using this as a true rental property, then you’re going to want to make sure that you file schedule E. You report all your income, you report all your expenses.
Recommended Read: Claiming Property Taxes on Your Tax Return
The same way as if you just simply rent it out to one individual for the entire year right, whether you do it in bits and bytes like an Airbnb type style or whether you do it simply I own this place and I rented it for the year doesn’t really matter. They’re all your improvements to the property or the things that you do to maintain it. Repairs and maintenance would be deductible, things you do to add value to the property that can be depreciated over time.
The other possibility is that this might be your house where you live most of the time. And if that’s the case then part of this will depend upon how much you rent out using Airbnb. If it’s only for a short period of time, like two weeks or less, you can actually have that income be, get this Bob, tax-free. Two of my favorite words are tax-free.
Note. If taxpayers meet requirements by using the property as a home and renting for less than 15 days, IRS Pub 527 says that “you aren’t required to report”. See IRS Pub 527 – page 19)
Robert Powell: Jeffrey, thanks for those tax tips, and we know that we have some more in store for our viewers in the weeks and months to come.
Jeffrey Levine: Well, I look forward to it and joining you and answering some more reader questions.
Editor’s note: Video produced by TheStreet’s Zach Faulds