3 Pro Tips to Reduce Your Home-Sharing Taxes

Guest post by Shared Economy CPA

Tip 1: Commission Fee Deduction

Platform commission fees represent a critical deduction opportunity. Home-sharing platforms charge commissions on each payment received, typically deducting these fees before deposit. However, the annual 1099 tax form includes the full commission amount charged throughout the year.

Key Point: It is important to deduct this amount otherwise you will be overpaying your taxes.

Hosts must separately account for these platform commissions to avoid inflated tax liability.

Tip 2: Entertainment Service Expenses

Streaming and entertainment services used exclusively for guest benefit qualify as deductible business expenses. Services like Hulu, Netflix, Showtime Anytime, and HBO Go can be deducted.

Proportional Deduction Rule: If services serve dual purposes (guest use and personal use), hosts may deduct only the proportionate business portion. If half the time the services are used for your guests and half the time you use it yourself, you can deduct half the amount.

Tip 3: Rent and Property Depreciation

This represents potentially the largest tax reduction opportunity for home-sharing operations.

For Renters

Rental payments are deductible based on the proportional space dedicated to short-term rentals. Example: A two-bedroom home with one bedroom exclusively rented yields a deduction calculation of 300 sq.ft. / 900 sq.ft. total = 1/3 rent deductible.

For Homeowners

Mortgage principal payments cannot be deducted. However, mortgage interest remains deductible. Property depreciation offers an alternative substantial deduction strategy.

Conclusion

Consult a qualified tax professional for personalized guidance on implementing these strategies based on your individual circumstances and local regulations.

Looking for tools to put these ideas into practice? Explore Properly’s solutions:

pricing options — find the right plan for your operation
Autoscheduler — automates turnover scheduling so nothing falls through the cracks
Real-Time Inspection — lets you verify property condition remotely after every turnover