Airbnb Host Taxes in California - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Airbnb Host income taxable in California?

Yes, income earned as an Airbnb host is absolutely taxable, both at the federal and California state levels. The IRS considers Airbnb hosting a business activity, meaning you're generally considered self-employed.

Federal Requirements: You'll report your Airbnb income and expenses on Schedule C (Profit or Loss From Business), which is filed with your Form 1040. This schedule calculates your net profit (income minus expenses). Even if you don't make a profit, you still need to file Schedule C if your gross income exceeds $400.

California Specific Rules: California has a graduated income tax system, meaning the more you earn, the higher the tax rate. Your Airbnb net profit (from Schedule C) will be added to your other income (W-2 wages, investment income, etc.) and taxed according to these brackets. California rates are among the highest in the nation, so accurate record-keeping and maximizing deductions are particularly important. You'll report this income on California Form 540. California also has its own rules regarding deductions, which may differ slightly from federal rules – it’s crucial to be aware of these.

Top Tax Write-offs for Airbnb Hosts

• Mortgage Interest & Property Taxes: If you own your property, you can deduct the portion of your mortgage interest and property taxes that relate to the time the property is used for Airbnb. This requires calculating the percentage of the year the property was rented.
• Utilities: Similar to mortgage interest, you can deduct a portion of your utilities (electricity, gas, water, internet, cable) based on the percentage of time the property is rented. Keep detailed records!
• Airbnb Fees: All fees paid to Airbnb (service fees, cleaning fees you pay to a cleaner, etc.) are deductible business expenses.
• Mileage & Vehicle Expenses: When you drive for Airbnb-related activities (cleaning supplies, guest meet-and-greets, maintenance), you can deduct either the actual expenses (gas, oil, repairs, insurance) or the standard mileage rate. For 2024, the standard mileage rate is approximately 67 cents per mile (verify the official IRS rate at IRS.gov). Keep a detailed mileage log!

The 15.3% Self-Employment Tax Surprise

Because you're self-employed, you're responsible for both the employer and employee portions of Social Security and Medicare taxes. This combined tax is called Self-Employment Tax and is currently 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). You'll calculate this on Schedule SE (Self-Employment Tax). You get to deduct one-half of your self-employment tax from your adjusted gross income, which can help lower your overall tax liability. Don't be alarmed when you see this tax – it's a normal part of being self-employed!

Closing Tip for California Residents

California’s tax laws are complex. Given the state’s high income tax rates, it’s highly recommended that you consult with a qualified tax professional (like myself!) or use tax software specifically designed for self-employed individuals. Accurate record-keeping throughout the year is essential to maximize your deductions and ensure you’re compliant with both federal and California tax regulations. Don't hesitate to seek professional guidance – it can save you money and headaches in the long run.