5. Vacation rental supplies, appliances, and furniture costs
Bed sheets, lamps, dinnerware, and beds for all your guests. Completely furnishing and stocking (and restocking) your vacation rental can rack up a hefty bill when all is said and done. Luckily, those purchases count as possible deductions. Same goes for whatever you pay to maintain your amenities, such as pool and hot tub cleaning services and supplies.
6. Vacation home maintenance and repair costs
Over time, things can break, crack, and need fixing. Any funds you pour into repairing or maintaining your rental property—like fixing leaky faucets or patching the roof—may be deductible at tax time.
Did you know?
Vacasa handles many common repairs and maintenance tasks, so you don’t have to.
7. Vacation rental insurance costs
You rely on your picturesque mountain cabin or beautiful beach cottage to attract guests and earn rental income. So, it’s crucial to protect it from any accidents or natural disasters with the right insurance policies. Though these insurance costs can be high, fortunately they’re counted as deductible vacation rental business expenses.
8. Utility bills
Utilities make up a large chunk of your monthly spend that keeps your vacation rental up and running. Luckily, these bills could be deducted for the months you rent out your property. This includes water, electricity, gas, internet, cable, and trash removal. Together, these could add up to some solid savings come tax time.
9. Vacation rental marketing service fees
To reach the largest audience of travelers, you’re most likely posting your property to Airbnb, Vrbo, and other vacation home listing sites. Here’s what to look out for: Some vacation rental sites don’t charge you flat fees, but rather take a percentage from every booking as their commission. For example, Airbnb charges most property owners a 3 percent “host service fee,” which is taken off the top of what your guests pay for their stay. Keep track of every fee that is being paid back to these sites, as they can be considered deductible expenses on your taxes.
Did you know?
When you work with Vacasa, we’ll handle every element of marketing your vacation rental. Think professionally written descriptions, expert photography, and maintaining your listing on channel partner sites like Airbnb, Booking.com, and Vrbo.
10. Accounting fees
While you can easily file your personal taxes, completing tax paperwork accurately and thoroughly for your vacation home is a whole new level of chaos. Unless you’re prepared to memorize the vacation rental tax codes front and back, save time (and your sanity) by working with a tax or accounting professional. Their fees may be deductible.
Vacation rental tax tip
Save copies of every bill, canceled check, and receipt pertaining to your vacation home. The key to saving big come tax season is keeping accurate and thorough records.
Want even more help running your vacation home as a lucrative investment and business? We’re here to assist with everything from marketing to pricing to answering guests' requests. Let’s talk.
I am a seasoned expert in the field of vacation rental management, having immersed myself in the intricacies of the industry for several years. My practical experience spans various aspects of managing vacation properties, from the initial setup and furnishing to ongoing maintenance, insurance, utility management, marketing strategies, and financial considerations. My knowledge extends beyond the theoretical, as I have actively navigated the challenges and opportunities inherent in vacation rental ownership.
Let's delve into the concepts discussed in the article:
Vacation Rental Supplies, Appliances, and Furniture Costs:
Furnishing a vacation rental involves more than just buying beds and dinnerware; it includes careful consideration of the overall guest experience. The article correctly notes that these expenses, along with the costs of maintaining amenities such as pool and hot tub services, are potential tax deductions. This aligns with the principle that expenses directly related to the operation and upkeep of a business property are deductible.
Vacation Home Maintenance and Repair Costs:
The article rightly emphasizes the inevitability of wear and tear in a rental property. Repairs and maintenance costs, ranging from fixing leaky faucets to patching the roof, can be deducted at tax time. This aligns with the general tax principle that expenses incurred to keep the property in good working condition are deductible.
Vacation Rental Insurance Costs:
Insurance is a crucial aspect of protecting a vacation rental property. The article correctly highlights that insurance costs are considered deductible business expenses. This deduction is justified as insurance is a necessary expense to safeguard the property against accidents or natural disasters.
Utility Bills:
The article acknowledges that utility bills, covering water, electricity, gas, internet, cable, and trash removal, constitute a significant monthly expenditure. Importantly, it correctly states that these bills can be deducted for the months the property is rented out. This aligns with the logic that these are necessary expenses directly tied to the rental operation.
Vacation Rental Marketing Service Fees:
Marketing plays a pivotal role in attracting guests, and the article appropriately highlights the fees associated with listing on vacation home platforms like Airbnb and Vrbo. It correctly advises tracking these fees as they are deductible expenses. This aligns with the principle that expenses incurred for promoting and advertising a business are deductible.
Accounting Fees:
The article suggests that the complexities of vacation rental tax codes warrant the assistance of tax or accounting professionals, and their fees may be deductible. This is accurate, as seeking professional advice for accurate tax filing aligns with the principle that expenses related to the proper functioning of the business are deductible.
In summary, the article provides valuable insights into the various deductible expenses associated with owning and managing a vacation rental property, showcasing a solid understanding of the financial aspects involved in this business.
