Renting out a spare room, a whole house, or a vacation property on Airbnb or Vrbo turns you into a landlord in the eyes of the IRS, and that comes with a long list of deductible expenses most first-time hosts never claim. Whether you rent a few weekends a year or run multiple listings full-time, understanding these deductions can significantly lower what you owe.
How the IRS Classifies Short-Term Rental Income
If you rent a property for an average of seven days or less per stay, the IRS generally treats it as a trade or business rather than passive rental activity, which changes which forms you use and which deductions apply. Rentals with longer average stays are typically reported on Schedule E instead.
The 14-Day Rule
If you rent your home for 14 days or fewer during the year, you don’t have to report the income at all — but you also can’t deduct rental expenses for those days. Once you cross 14 days of rental use, all rental income becomes taxable and the deductions below come into play.
Mortgage Interest and Property Taxes
If you rent out part of your home, you can deduct the rental-use percentage of your mortgage interest and property taxes. If you rent an entire dedicated property, all of the mortgage interest and property taxes tied to that property are deductible against rental income.
Cleaning, Supplies, and Guest Amenities
Cleaning fees you pay a service or contractor, laundry costs, toiletries, coffee, and other guest supplies are fully deductible. If you charge guests a separate cleaning fee, remember that fee counts as taxable rental income too.
Platform Fees and Booking Commissions
Airbnb and Vrbo both take a service fee or host commission out of every booking. That amount never reaches your bank account, but it’s still a deductible business expense — check your host payout summary for the total.
Furniture, Repairs, and Depreciation
Furniture, linens, kitchenware, and small appliances bought for the rental are deductible, either immediately or depreciated depending on cost. Repairs that keep the property in working condition are deducted in the year paid, while improvements that add value get depreciated over several years.
Utilities, Internet, and Streaming Services
Electricity, water, gas, trash service, internet, and even a streaming subscription you provide for guests are deductible in proportion to the rental use of the property.
Insurance and Property Management Fees
Short-term rental insurance premiums, host protection add-ons, and any fees paid to a co-host or property manager who handles bookings and guest communication are all deductible.
Travel to Check on Your Property
If you travel to the rental property to handle maintenance, meet contractors, or manage turnover, that travel — including mileage, lodging, and meals under the 50% rule — is deductible as a business expense.
What You Can’t Deduct
The value of your own time spent cleaning or managing the property isn’t deductible, and if you use the property yourself for personal stays, you must allocate expenses between personal and rental use based on the days used for each.
Frequently Asked Questions
Do I need an LLC to deduct these expenses? No. You can deduct legitimate rental expenses whether you own the property personally or through an LLC — the entity structure affects liability protection, not deductibility.
What if I only rent a room in my own house? You still deduct expenses, but only the percentage of your home used for the rental, based on square footage or another reasonable method.
Is short-term rental income subject to self-employment tax? Usually not, unless you provide substantial hotel-like services such as daily housekeeping or meals, which can push the activity into self-employment tax territory.
Talk to a licensed tax professional about whether your rental qualifies for the 14-day exclusion or which depreciation schedule fits your property, since the rules shift quickly based on personal use days and average guest stay length.