Most Airbnb hosts track their income carefully. Far fewer track their deductions with the same level of attention, and that gap costs real money every April.
When I filed taxes after my first full year of hosting in Long Beach, I was surprised by how much I could actually deduct. Running two units as a business meant I had legitimate write-offs I’d been completely ignoring, from cleaning supplies to the business courses I took to improve my listings. If you treat your Airbnb like the small business it is, the IRS treats it the same way.
This guide breaks down the key vacation rental tax deductions available to short-term rental hosts, including a few that most articles skip entirely.
TLDR:
- Short-term rental income is taxable, but so are many of your operating expenses
- The most valuable deductions are depreciation, mortgage interest, and operating costs
- Mixed-use properties (personal + rental) require proportional deductions based on rental days
- Document everything throughout the year, not just at tax time
- Consult a CPA who specializes in real estate or STR properties
The 14-Day Rule: When Your Rental Counts as a Business
Before claiming deductions, you need to understand which category your property falls into. The IRS applies the “14-day rule”: if you rent your property for more than 14 days per year AND your personal use stays below 14 days (or 10% of total rental days, whichever is greater), the IRS treats it as a rental business. That classification unlocks the most complete set of deductions.
If you cross into personal use territory, some deductions get limited or prorated. For hosts who rent out a dedicated unit full-time and never use it personally, like I do with my Long Beach studio, you’re in clean rental-business territory. Your deductions are straightforward.
If you live in your primary home and also rent part of it, you’ll need to prorate expenses based on the percentage of the home used for the rental and the percentage of time it’s actually rented. It’s more complex, but still very much worth tracking.
The Big Deductions: What to Prioritize First
These are the deductions with the highest dollar value for most hosts.
Mortgage interest. If you have a mortgage on your rental property, the interest portion is deductible. For a dedicated rental property, you can deduct 100% of the interest. For a mixed-use property, you’ll prorate it based on rental use.
Property depreciation. This is the one many new hosts miss entirely. The IRS allows you to depreciate the structure of a residential rental property over 27.5 years. On a $300,000 property (land excluded), that’s roughly $10,000 per year in depreciation deductions, even if the property is gaining market value. You’ll need to recapture this when you sell, but it’s a significant annual write-off while you’re hosting.
Property taxes. Deductible as a rental business expense. If the property is mixed-use, prorate accordingly.
Insurance premiums. Short-term rental insurance, homeowner’s insurance allocated to the rental, and any umbrella policy coverage tied to the property are all deductible.
Repairs and maintenance. Fixing a broken faucet, repainting a bedroom, patching a roof leak, replacing a broken lock: these are operating expenses deductible in the year you pay them. Note the distinction: repairs restore something to working condition and are deducted immediately. Improvements add value or extend useful life (like installing a new HVAC system) and must be depreciated over time.
Operating Costs That Add Up Fast
Beyond the big structural deductions, your day-to-day operating costs are almost entirely deductible. Here’s what I track throughout the year.
Cleaning and supplies. Professional cleaning fees, laundry, cleaning products, paper goods, toiletries, and any restocking costs are all deductible. If you pay a cleaner directly, keep records of every payment. If you do the cleaning yourself, your time is not deductible, but every supply you buy is.
Airbnb service fees. The service fees Airbnb takes from your payouts are deductible as a business expense. You can find them summarized in your Airbnb earnings reports.
Utilities. For a dedicated rental unit, 100% of electricity, gas, water, internet, and trash are deductible. For a mixed-use property, prorate based on rental days or rental space percentage.
Furnishings and equipment. A new coffee maker, extra linens, a replacement sofa, smart locks, a ring doorbell: these items are deductible either as immediate expenses (if under the de minimis safe harbor threshold of $2,500) or depreciated if they’re pricier. Keep receipts for everything you buy for the listing.
Platform subscriptions and hosting tools. Dynamic pricing tools, property management software, keyless entry subscriptions, and any app you pay for specifically to run your rental business are deductible operating expenses.
The Deductions Most Hosts Skip
These are legitimate write-offs that show up in every tax guide but still get left on the table.
Home office deduction. If you have a dedicated workspace in your home where you manage your rental business, you may qualify for a home office deduction. This covers a proportional share of your home’s expenses tied to that space.
Travel to your property. Driving to your rental to handle repairs, meet a plumber, or do a property inspection is deductible. Keep a mileage log, the current IRS standard mileage rate makes this straightforward.
Education and professional development. Courses, books, and resources you buy to improve your hosting business are deductible. If you purchased a template or resource to level up your guest experience operations, that qualifies. The Complete Airbnb Guidebook template I use to manage guest communication across both units falls into this category.
Professional fees. CPA fees, attorney fees for rental-related legal questions, and any professional service you hire specifically for the rental business are deductible.
Photography. If you hired a photographer for your listing photos, that’s a deductible marketing expense.
Guest amenities. Welcome baskets, snacks, coffee, and any consumable amenities you provide are deductible as operating costs.
Record-Keeping: Do This All Year, Not Just in March
The single biggest mistake I see new hosts make is waiting until tax season to reconstruct their expenses. By then, receipts are lost, bank statements require hours of cross-referencing, and deductions get missed.
Here’s the system that works for me: I keep a dedicated credit card for all rental-related purchases. Every expense goes on that card, nothing personal. At the end of each month, I log it in a simple spreadsheet with the vendor, amount, and expense category. Airbnb sends year-end earning summaries that capture their fees automatically.
For mileage, I use a phone app that logs trips in the background. At tax time, I export the report and hand it to my CPA.
If you’re still figuring out your income and expense baseline, the guide on short-term rental income is a good starting point before you layer in the deductions side.
When to Bring in a CPA
You can handle basic STR taxes yourself with software like TurboTax if your situation is clean: one dedicated rental property, no mixed personal use, no complicated depreciation elections. But if any of the following apply, a CPA who specializes in short-term rentals or real estate is worth every dollar.
- You have a mixed-use property (you also use it personally)
- You want to use cost segregation to accelerate depreciation
- You’re trying to use rental losses to offset W-2 income under the STR loophole
- You own multiple properties
- You have significant improvement expenses you’re not sure how to categorize
A good CPA pays for themselves many times over in deductions they’ll find that you’d otherwise miss.
The Bottom Line
Running an Airbnb is running a business. The tax code rewards you for treating it that way. Start tracking expenses from the first month you host, keep your rental and personal finances separate, and know which deductions apply to your specific property setup.
The difference between a host who tracks everything and one who doesn’t can easily be several thousand dollars at tax time. That’s real money, and it has a direct impact on whether your rental property is worth operating.