Airbnb Accounting

Airbnb Accounting Mistake: Reporting Net Income

By
Easeify
on
Oct
5
,
2024

At Easeify, we specialize in bookkeeping within QuickBooks Online. This blog should provide you with a quick tip on the correct way to report your Airbnb rental income.

What’s Easeify?
A virtual bookkeeping firm that makes bookkeeping easy. We specializes in working with service businesses and non-profits on the cash basis of accounting. Get your books completed with your own dedicated CPA, keeping tax deductions in mind.
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Key Takeaways

  • You must report your Airbnb income as gross rental income.
  • It is a red flag to the IRS to report only the bank deposits received from Airbnb, and it is considered improper accounting practices.
  • In order to report gross rental income in your books, you can use a software such as Bnbtally that connects to QuickBooks, and will add in the proper numbers for you.
  • An alternative to Bnbtally is to manually split out each Airbnb bank deposit yourself to account for gross income minus the fees.

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A common mistake that we see at Easeify is reporting net income, instead of gross income. This is very common amongst not only Airbnb rentals, but other payment platforms such as Stripe, Square, PayPal, and many others.

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Airbnb Accounting Mistake: Reporting Net Rental Income

When accounting for Airbnb rental income, you can not just report the bank deposits that come into your business bank account as the rental income for your business. For example, in QuickBooks you have your bank transactions syncing, and you come across a bank deposit from Airbnb. Yay! You received a payout, your rental income from Airbnb...Let’s categorize this to business income! No, not so fast. That would be accounting for your rental income incorrectly and is a red flag to the IRS. Why is this a red flag? Airbnb is going to report your gross rental income to the IRS, not net income.

One way to report gross rental income is to pull a report from Airbnb that will provide you with this information, and then you can manually split out the transaction to account for gross income minus the fees. You will report room fees, cleaning fees, pet fees, hosting fees, etc. Another option is to use a software such as Bnbtally that connects to QuickBooks online, and will automatically send this information over to QuickBooks as a journal entry for you to then match to the deposits.

 

Conclusion

If you are in need of help reporting your gross income correctly, please reach out for help! It is way better than receiving an IRS notice. The correct way of reporting Airbnb income as well as income from any other payment platform is to report the gross income minus any fees. There are some software’s that can help achieve this efficiently, or the transactions can be manually split.

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 If you need assistance with your bookkeeping, reach out to us! This is what we are here for.

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