How should I report my Airbnb income when I provide breakfast and housekeeping services for my guests?
When an Airbnb activity mimics a regular “B&B”— in other words, not just accommodations but breakfast, housekeeping, or other guest services are provided — the IRS treats it as a business. Since this applies to you, you’ll report your income and expenses on Schedule C: Profit or Loss from Business. You’ll also pay
self-employment tax on your net profit (if it’s greater than $400). To avoid paying this extra tax and treat your operation as a rental, you'll need to stop serving breakfast and wait until after your guests have checked out to clean the rooms. When you simply hand the keys over and don’t perform any services for your guests, your activity is deemed a rental and your income and expenses are reported on Schedule E.
TurboTax has several tips to help you get started with an Airbnb or Flipkey service:
If you have rented out your home using Airbnb, Flipkey , or another service, were there any unexpected expenses that you wish you'd known about ahead of time? What is the one piece of advice you have for someone who is just getting started? We'd love to hear about your experience.