Deductible Expenses for Vacation Rental Owners

As a vacation rental owner, finding and deducting the expenses that are related to the operation of your vacation rental business can offer significant tax savings. Many rental owners fail to take advantage of all the deductions they are eligible for. Be sure to keep track of your expenses throughout the year so that when it’s time to prepare your taxes you have everything you need at hand.

Tracking expenses

Here are the expenses that you can deduct to save money on your taxes.

1. Rent. If you rent your home, your rental expenses are a tax deductible expense and can offer you one of the greatest opportunities for tax savings.

2. Utilities. Utilities, such as electricity, cable TV and internet, water and sewer, are tax deductible expenses.

3. Cleaning Fees. When you hire a professional cleaning service or purchase cleaning supplies to keep the rental clean for guests, deduct these expenses on your taxes.

4. Vacation Rental Commission Fees. You should obtain a statement of your earnings from the vacation rental company so that you have a record of the commission fees that were deducted from your earnings. These commission fees that are charged by the vacation rental platform are a tax deductible expense.

Tracking expenses, fees, and commissions

5. Membership Fees. If you are a member of an organization that exists solely for educational purposes, such as VRMA, you can deduct the membership fees on your taxes.

6. Furniture. If you purchased furniture for your guests, you can deduct these costs. Special rules apply to deductions for furniture so consult a tax professional.

7. Amenities. If you provide food, toiletries or other amenities exclusively for use by your guests, these expenses are considered as an ordinary and necessary part of running your vacation rental business. Make sure that you keep track of the items that are used exclusively for your business separately from any personal items.

This list of deductions is designed to apply to the most common vacation rental host situations. It is not a comprehensive list. Consult a tax professional if you are a real estate professional, or if you also use the home for your own personal purposes.

Reprinted from Shared Economy CPA