What Forms Do I Need to File?
Since you are not an employee and work on your own, you will be required to pay taxes differently than employees do. You’ll need to use the amounts reported on the 1099-MISC provided by Airbnb to calculate how much you owe.
As a 1099 business, you’ll need to pay estimated taxes (Form 1040-ES) on your income throughout the year. These payments are made to the federal government. You’ll also need to make similar payments to the state tax agency in your state on four due dates throughout the year.
You are also responsible for paying self-employment taxes (Social Security and Medicare). Since an employer does not take these taxes out for you on your behalf, you will need to pay them directly. Schedule SE is used to calculate these taxes.
What Are the City and Local Requirements for 1099 Businesses?
In addition, you will also need to look to state and local agencies to determine your respective local business obligations. Many Airbnb hosts are required to pay occupancy taxes to their city as a result of their Airbnb rental activities. However, depending on your tax jurisdiction, there may also be other taxes that you are responsible for.
Here are the Airbnb requirements for several major cities:
New York City: Airbnb is currently illegal in New York City. However, they're trying to resolve this issue quickly.
Los Angeles: Some Los Angeles Airbnb businesses may be required to obtain a business license (hotels/motels). Los Angeles also applies a Transient Occupancy Tax (TOT) of 12% on any unincorporated areas within the county, which is collected by Airbnb.
San Diego: All San Diego Airbnb hosts are required to register and obtain a Business Tax Certificate. San Diego taxes the owners and operators of rentals, unless they are owner-occupied. Airbnb hosts who do not occupy their rentals are required to pay an annual Rental Unit Business Tax. San Diego also imposes a 10.50% Transient Occupancy Tax and a Tourism Marketing District Assessment (TMD), which is an additional percentage tax based on the number of units. The TOT and TMD are collected by Airbnb.
San Francisco: San Francisco Airbnb hosts must obtain a valid business registration certificate from The Office of the Treasurer & Tax Collector. Then they must also undergo short term rental registration by scheduling an appointment with the Planning Department and paying a $50 fee. As far as ongoing requirements, San Francisco imposes a 14% Transient Occupancy Tax which is collected by Airbnb.
Administrative Code, Chapter 41A.5(g) also requires Airbnb hosts to file quarterly reports which disclose the number and dates of the short-term rentals for of unit with The Office of Short Term Rentals.
Chicago: There are several requirements for Chicago Airbnb hosts. The City of Chicago requires licenses for vacation rentals, which are defined as a dwelling unit with up to 6 sleeping rooms that are available for short term rental and are not owner-occupied. A business license is also required for a bed and breakfast in Chicago. Chicago imposes a 4.5% “Hotel Accommodations Tax which is collected and remitted by Airbnb.
It is important to follow all of the rules for federal, state, and local tax filings to ensure that your Airbnb business is 100% compliant. To learn more about these requirements, go to the tax information page for your state.