⚠️ CRITICAL WARNING: This industry has a "trap" known as the 14-Day Rule (or "Masters Rule") and strict rules on "Personal Use." If you use the property yourself for more than 14 days (or 10% of the days it is rented), your deductions are severely limited.
Maximize Profits on Your Investment Property
Running a short-term rental is not just "passive income"—it is an active business operation involving hospitality, property management, and logistics. Because of this, you have many deductible expenses. Use this checklist to capture your costs for the 2025 tax year.
🏠 Property & Utilities
- Mortgage Interest: Interest paid on the loan for the rental property.
- Property Taxes: State and local property taxes.
- Insurance: Premiums for landlord or specific short-term rental liability policies (standard homeowner's insurance often doesn't cover STRs).
- Utilities: Electricity, gas, water, sewer, and trash removal.
- Internet/Cable: High-speed Wi-Fi and cable packages provided for guests.
- HOA Fees: Homeowner Association dues (if the HOA permits rentals).
🧹 Cleaning & Maintenance
- Cleaning Fees: Payments to cleaning crews or turnover services between stays.
- Supplies: Cleaning chemicals, trash bags, vacuum cleaners, and mops.
- Lawn & Pool: Landscaping, snow removal, and pool maintenance services.
- Pest Control: Monthly or quarterly spraying services.
- Repairs: Fixing leaky faucets, broken locks, or painting touch-ups.
🛋️ Furniture & Decor
- Furnishings: Beds, sofas, tables, and chairs. (Note: Large purchases may need to be depreciated over several years, or you may be able to use "Bonus Depreciation" to write them off all at once).
- Soft Goods: Sheets, towels, pillows, blankets, and curtains.
- Kitchenware: Pots, pans, dishes, silverware, and coffee makers.
- Decor: Wall art, rugs, plants, and mirrors.
☕ Guest Amenities & Experience
- Consumables: Coffee, tea, sugar, creamer, and welcome snacks.
- Toiletries: Shampoo, conditioner, body wash, hand soap, and toilet paper.
- Streaming Services: Netflix, Hulu, or Disney+ accounts logged in on the property TV.
- Welcome Guides: Printing costs for house manuals or local guidebooks.
💻 Platform & Management Fees
- Host Fees: Service fees charged by Airbnb (usually 3%), VRBO, or Booking.com.
- Property Management: If you pay a company (like Evolve or Vacasa) to manage the booking/cleaning, their commission is deductible.
- Smart Tech: Subscriptions for pricing software (PriceLabs), smart locks, or noise monitoring devices (NoiseAware).
🛡️ Safety & Security
- Hardware: Smart locks (August, Schlage), Ring doorbells, and exterior cameras.
- Safety Gear: Fire extinguishers, smoke detectors, carbon monoxide detectors, and first aid kits.
⚠️ Important Compliance Note
- The "14-Day / 10% Rule": If you stay in your rental for more than 14 days a year (or more than 10% of the total days it was rented to others), it is considered a "residence," not a pure rental business. This limits your deductions to the amount of rental income you earned (you cannot claim a loss).
- Schedule C vs. Schedule E: Most Airbnb hosts file on Schedule E (Passive Income). However, if you provide "substantial services" (like daily cleaning, meals, tours, or concierge), you may need to file on Schedule C and pay Self-Employment tax.
- Occupancy Taxes: Many platforms collect occupancy tax for you, but if yours does not, you are responsible for remitting these to your local city/county.
Disclaimer: This list is for educational purposes and does not constitute legal or tax advice. Deductibility depends on your specific business structure. Please consult with KJC Tax Preparation & Bookkeeping to confirm your eligibility.