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8 Min. Read

Airbnb 1099 Tax Form: Filing Requirements and Steps

Airbnb 1099 Tax Form

Have you been wondering what a 1099 tax form is? There is a lot to know and understand as an Airbnb host and you’re going to have to pay taxes. But the good news is you don’t have to be a tax professional to figure out taxable income, gross earnings, and other business expenses. 

Calculating your 1099 taxes for your Airbnb account might seem like the last thing on your mind as you handle check-ins, guest issues, and anything else you need to worry about. Your confidence in reporting your Airbnb 1099 income will increase after reading this article.

So, keep reading to learn all about the Airbnb 1099 tax form. We will dive into why the form is important to have, how to receive your form, and how to file it.

Table of Contents

Why Is Airbnb 1099-K Important?

How to Get a 1099-K Form from Airbnb

How to File Airbnb 1099-K

Key Takeaways

Frequently Asked Questions

Why Is Airbnb 1099-K Important?

Many accountants who are unfamiliar with Airbnb fail to deduct the hidden sums that are included in the Airbnb 1099-K form. This doesn’t refer to ordinary expenses that everyone is already aware of. In comparison to what is actually paid to hosts, Airbnb reports higher numbers. Because of this, many Hosts are paying more in taxes than they should.

To put things in perspective, each year Airbnb issues form 1099-K to the Internal Revenue Service (IRS). This happens for each host who earns $20,000 or more in gross revenue or surpasses 200 transactions by the end of the year. If you’ve received a 1099-K from Airbnb for the year, you’ll need to report the exact amount that’s indicated in box 1a.

You will also need to go through the process of writing off all your expenses. You will also have to do this for refunds in order to avoid getting audited by the IRS. The IRS might flag your return for review if the income reported on your tax return and the income shown on your Airbnb 1099-K differs.

As a host, you are responsible for figuring out the fees that are accrued by Airbnb for each reservation made throughout the year. These fees are deducted from each payout before it reaches your bank account, but they are not included in the 1099-K that Airbnb reports. 

This is a common practice among online payment processors who file their reports using the 1099-K format. In these instances, the total income or gross income is reported rather than the amounts less any fees, or net income.

The host pays Airbnb a fee of 3% (or, in some cases, it can even rise as high as 15%) for each reservation. These Airbnb service fees, also referred to as host fees, are deducted from reservation earnings prior to each payout. They are not included in the data reported on the Airbnb 1099-K.

Instead of processing an actual refund from the host’s bank, Airbnb simply deducts the refund amount from the host’s subsequent payout. This often happens when hosts on the platform pay a guest back for a cancellation request, resolution adjustment, or a shortened stay. The Airbnb 1099-K is not reduced by these refunds, though.

As you can see, there is a lot to know and understand when it comes to the Airbnb 1099-K forms. And, knowing how it works and its general purpose can even help you save some money. But most of all, it’s important to know about some of the fees and taxes that Airbnb takes so you can ensure it’s the proper amount.

The Easy Way To Pay Your Team

How to Get a 1099-K Form from Airbnb

Depending on the total amount you earn, your taxpayer information, the number of transactions, and state laws, you might receive two separate forms from Airbnb. These are the 1099-NEC and 1099-K forms. For the 1099-NEC form, Airbnb will send it to you directly if you earn more than $600 in a year from a single client. 

For the 1099-K form, Airbnb will automatically send it to you if you meet two requirements. These are: 

  • If you earn over $20,000 over the course of a calendar year from sales or reservations 
  • If you incur over 200 different reservations or transactions in the same calendar year 

However, the rules are different if you operate your short-term rental business out of Massachusetts or Vermont. You’ll get a Form 1099-K if you made more than $600 from reservations even if you didn’t make $20,000 or more than 200 transactions. 

You’ll also get a tax form 1099-K if, in a given tax year, you processed 200 or more transactions on a third-party platform like PayPal and made more than $20,000 in revenue.

To find your 1099-K, go to the Payouts Page. From here, you can find the relevant information under Taxpayer Info. At the end of January, you’ll typically get a notification that your form is prepared.

Now, there are instances where you might not receive the right tax form or might not receive it on time. If you don’t file because you lost your 1099 or didn’t get one, the IRS is very strict about it. Check your account information if you didn’t receive a form but are certain that you complied with the reporting requirements. 

Your address might have been entered incorrectly, for example, which can cause the tax form to be delivered to the incorrect location. Tax forms are typically mailed or emailed by January 31. You can check your account for Airbnb tax information if you did not receive a 1099 form by January 31. 

Even though you can technically file without a 1099, your tax return may be flagged for review if the income you reported is different from the income reported on your 1099-K or 1099-NEC.

How to File Airbnb 1099-K

You should first send out Form W9s to your contractors, which you can then use to complete Form 1099. It can be helpful to issue 1099 forms prior to your contractors starting their work. Obtaining a completed W9 after the end of the year is much more difficult. 

Sadly, you can’t just print 1099 forms from the internet and send them directly to the IRS. Because each 1099-MISC form has a different document locator number, you can only mail official 1099-MISC forms to the IRS. In fact, there is a $50 fine for submitting the incorrect 1099 form.

Fill out box 7 to indicate non-employee compensation. You must also state in box 7 whether you paid your contractors back for supplies. All payments, including for parts and supplies, should be included in the final sum. 

If you need a little extra help managing all your expenses, FreshBooks provides an easy-to-use and intuitive solution. You can track and manage everything you need from one central location to make your life a whole lot easier. This includes tracking your Airbnb income and expenses, and even the ability to reconcile your 1099-K reported earnings. 

For specific instructions on mailing returns, consult the IRS website or speak with a tax expert.

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Key Takeaways

There are some challenges that come with filing a 1099-K form. The amount Airbnb reports in their 1099-K and the amount you actually receive are not the same, and this discrepancy does not work in your favour. 

To avoid having to pay the additional taxes, you’ll need to calculate the total service fees and refunds from Airbnb and have them subtracted from the 1099-K that was reported. Additionally, an accountant with experience in the field will already be aware of how to do this.

Airbnb will automatically send you a 1099-K form if you earn over $20,000 and have over 200 reservations in the same calendar year. It’s important to note that you must mail your forms directly back to the IRS. As well, keep accurate records of your transaction history, gross revenues, and any taxes withheld. Airbnb expects you to have this information ready.

FAQs on Airbnb 1099 Tax Form

Does Airbnb send 1099-K Forms?

Yes, Airbnb must send you your 1099-K form. However, they only send it if you meet two requirements. These are if you earn over $20,000 from reservations in a calendar year and incur over 200 different reservations in the same calendar year. 

How do I avoid taxes on Airbnb?

If you use your Airbnb as a short-term rental and don’t rent it out for more than 14 days, you will not owe any taxes. As well, you must also use the vacation or short-term rental home for 14 days yourself for this to be applicable. 

How much can you earn on Airbnb before paying taxes?

Airbnb will send you your 1099-K form if you make over $20,000 and have over 200 reservations in the same calendar year. Make sure you keep your gross receipts for all rental income.

What If I don’t give Airbnb my tax info?

If you don’t submit your taxpayer information to Airbnb, it can withhold your taxes. Airbnb will send you an IRS Form 1099 (or Form 1042-S for non-US citizens) at the end of the year that details any amounts that were withheld. In some circumstances, you might be able to request a refund from the IRS for the money that was withheld.