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Why am I'm getting charged self employment tax on my vacation rental income?

According to online sources, it seems that many or most vacation rentals do not qualify as business in my situation. I have one property, rent it out for maybe 100 days per year in 2-5 day increments but I don't 'manage' it. I just post it on Airbnb, Vrbo and clean it in between guests (hiring housekeeper for each cleaning -not employing one or managing)
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3 Replies
MinhT1
Expert Alumni

Why am I'm getting charged self employment tax on my vacation rental income?

Short-term rentals (stays averaging less than 7 days per rental) are reported on Schedule C and are considered as a business. 

 

Net income from that Schedule C is subject to self-employment tax.

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Why am I'm getting charged self employment tax on my vacation rental income?

You are correct.

ST rentals that average 7 days or less are reported on Schedule E and not subject to self-employment tax unless you provide substantial services; ie: cleaning of the rental everyday, changing the sheets everyday, and providing other "hotel" like services.

I recommend you go back through the rental question section to make sure you answered all the questions appropriately.  The other issue to be aware of are the questions related to your participation; passive, active and material participation.

 

*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.

Why am I'm getting charged self employment tax on my vacation rental income?

Thank you.  I'll go back and change my answer about actively participating and see if that helps.  Nobody actively participates other than to clean up between guests, resupply, and maintain the property.  

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