Airbnb Tax Compliance 101: Schedule E & T776 Guide
Tax season doesn't have to be stressful. As a short-term rental host, understanding your tax obligations is the first step to peace of mind.
IRS Schedule E (USA)
If you rent out a property for more than 14 days a year, you must report the income. This is typically done on Schedule E (Supplemental Income and Loss).
Key deductions include:
- Mortgage interest
- Property tax
- Insurance
- Cleaning and maintenance
- Platform fees (Airbnb/VRBO service fees)
- Utilities
📥 Free Download: STR Expense Categorization Guide - Complete checklist with Schedule E line references for every deduction.
CRA T776 (Canada)
For Canadian hosts, the form is T776 (Statement of Real Estate Rentals). Similar to the US, you report gross income and deduct allowable expenses.
The Gross vs. Net Trap
A common mistake is reporting the net amount deposited into your bank account as your total income. This is incorrect. You must report the gross income (what the guest paid minus taxes collected by the platform) and then deduct the platform fees as an expense.
Keeping Clean Records
The best defense against an audit is clean, reconciled records. Ensure every bank deposit has a corresponding source document (payout statement) and every expense has a receipt.
For specific help with the 1099-K discrepancy, read why your 1099-K is higher than your bank deposits. Canadian hosts should check out our Canadian tax traps guide.
Related Articles
- Why Your 1099-K Doesn't Match Bank Deposits
- Canadian Airbnb Tax Guide: GST/HST and CCA
- Advanced Bookkeeping Scenarios Solved
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