Can I Write Off My Mortgage If I Airbnb My House?

One of the most typical subjects that Airbnb hosts wonder whether mortgage payments are qualified as a tax deduction. It should be acknowledged that the full mortgage payment is not deductible. However, a portion of the mortgage interest and property taxes might be eligible under Airbnb tax deductions. The deduction amount changes in accordance with how the property is used and how expenses are tracked.

Mortgage Interest Deductions for Airbnb

The IRS does not allow the deduction of principal mortgage payments. Yet, mortgage interest can be deducted under specific scenarios. The amount eligible for deduction varies in line with whether the property is rented partially or exclusively for Airbnb purposes:

• Primary Residence with Airbnb Rental: If only part of the home is rented, mortgage interest is considered deductible in proportion to the rental space’s usage.
• Entire Property as an Airbnb Rental: If the house is rented out full-time with no personal use, the full mortgage interest might be eligible as a rental expense.

Dividing the square footage of the rental space by the total square footage of the home provides an allocation percentage in order to determine the deductible portion.

How Property Taxes Factor into Deductions

Similar to mortgage interest, property taxes can also be partially deducted. The percentage allocated to rental use should be documented too. Homeowners should maintain healthy tracking records presenting the time the property was rented out to substantiate these deductions.

Additional Airbnb Tax Deductions Related to Mortgage Expenses

It should be noted that the mortgage principal is not deductible. Yet, several related expenses can qualify under short-term rental tax write-offs:

• Home Office Deduction: If Airbnb operations involve a dedicated workspace, a portion of rent and mortgage interest alongside utilities may be deductible.
• Repairs & Maintenance: Fixing appliances or patching walls as well as minor updates to rental spaces are deductible expenses.
• Depreciation: If renting out the entire home, depreciation can be claimed over time which presents further additional tax benefits.
• Utilities & Internet: If such services are included in guest stays, a percentage of the costs maybe qualified as deductible expenses.

Tracking Rental Usage for Maximum Deductions

Accurate record tracking is fundamental in terms of claiming deductions for Airbnb tax purposes.

• Records of rental dates and rental income as well as associated expenses should be kept.
• A clear separation should be maintained between personal and rental-use expenses.

Tax software or professional accounting services can be leveraged in order to calculate proportional deductions.