Airbnb business has taken over the hospitality industry in the past few years drastically. We now get to see that lot of traveller wants to explore another city or country just like a local and hence they are not choosing to stay at a luxury hotel. Airbnb has been a game-changer. For those of you who are still unaware of the Airbnb business, you definitely must know about it. Airbnb is a platform for individuals to rent out their property as lodgings for travellers. It is a win-win situation for both host and renter – renters want an accommodation that is homely while enabling them to experience the place like a local, and the host wants to let out their unused space.
Airbnb Also Provide Other Services Like –
Talking about Airbnb and its revenue model, its major revenue comes from service fees from bookings charged to guests and hosts. There are two different service fee structures split-fee and host-only fee.
1. Split-fee: This fee structure is the most common. A service fee is deducted from the host payout, and a service fee is charged to guests. Depending on the reservation’s size, guests must pay a non-refundable service fee based on the type of listing—usually under 14.2%, while the hosts are also charged a 3% fee. Both prices are charged on subtotal, which is the nightly rate plus cleaning fee excluding Airbnb fees and taxes.
2. Host-only fee: In the host-only fee structure, the entire service fee is deducted from the host payout. Here, no Airbnb service fee is paid by guests. The fee typically from 14% to 16%. This structure is mandatory for hotels and some other hosts.
The fee for the host with a super strict cancellation policy is slightly higher than usual, and the same is for an Airbnb Plus host. As for Airbnb Experiences, a 20% service fee is charged to the host.
Airbnb business now has become the main income for many hosts. However, you must be aware of the tax implication of this income. There are few situations which have different tax implication, let us understand each one of these.
Why should one treat their property as a rental property? Because there are homeowner deductions and operating deduction you can claim. If you are just a renter hosting your rented space, you can only claim operating deductions
If you rent rooms or apartments through a partnership, S Corp., C Corp., or other business types, you will need to report your rental activities differently, such as on form 8825 or schedule 1065, 1120, 1120S, etc.
Airbnb sends the 1099 form to the IRS, so the IRS know exactly how much money they have paid you. Make sure that you report exactly what is shown on your 1099.
Here is how you can have an efficient bookkeeping process in place to help you with your Airbnb business-
Read about: Learn Essential Steps to Simplify Bookkeeping
As and when your Airbnb business grow, the complexities in the financial data will also grow. The need to have an efficient bookkeeping system in place is evident to ensure any business’s success, including your Airbnb business. Bookkeeping can be a complex task for those who are a novice in finance and that why we suggested hiring a bookkeeper. You can also contact us directly and get a team of experts bookkeeper and accountants taking care of your charts of accounts and business finances. Contact us at +(1)-214-329-9080 or email us at [email protected]