Airbnb Host Taxes in Hawaii - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Airbnb Host income taxable in Hawaii?

Yes, income earned as an Airbnb host is absolutely taxable, both at the federal and Hawaii state levels. The IRS considers Airbnb hosting a business, meaning you’re responsible for reporting your earnings and paying taxes on any profit.

Federal Taxes: 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 only host occasionally, you generally need to report the income.

Hawaii State Taxes: Hawaii has a graduated income tax system. This means the tax rate you pay increases as your income increases. Your Airbnb net profit (as calculated on Schedule C) will be added to your other income (wages, investments, etc.) and taxed according to the Hawaii tax brackets for the 2024 tax year (filing in 2025). Hawaii also has a General Excise Tax (GET) which may apply to your Airbnb income – see the section below regarding Transient Accommodations Tax (TAT).

Important Note: Transient Accommodations Tax (TAT): Hawaii requires Airbnb hosts to collect and remit TAT. This is separate from your income tax. You must register with the Hawaii Department of Taxation to collect and remit TAT. Failure to do so can result in penalties. Information can be found on the Hawaii DOTAX website: https://tax.hawaii.gov/

Top Tax Write-offs for Airbnb Hosts

Maximizing your deductions is key to minimizing your tax liability. Here are some common write-offs for Hawaii Airbnb hosts:

• Mortgage Interest & Property Taxes: If you own the property, you can deduct the portion of your mortgage interest and property taxes that relate to the time the property is used for rental. If you rent out only a portion of your home, you’ll need to allocate these expenses based on the percentage of your home used for rental.
• Utilities: Expenses like electricity, water, gas, internet, and cable are deductible, again allocating the portion used for rental purposes if it’s not exclusively a rental property.
• Cleaning & Maintenance: Costs associated with cleaning the property between guests, as well as repairs and maintenance (e.g., fixing a leaky faucet, landscaping) are deductible. Major improvements that increase the property’s value are generally capitalized and depreciated over time.
• Mileage & Vehicle Expenses: When you use your vehicle for Airbnb-related activities (e.g., picking up guests, going to the store for supplies), you can deduct either the actual expenses (gas, oil, repairs, etc.) or the standard mileage rate. For 2024, the standard mileage rate is approximately 67 cents per mile (verify the official IRS rate at https://www.irs.gov/newsroom/standard-mileage-rates-for-2024). Keep a detailed mileage log!
• Airbnb Fees & Software: The fees you pay to Airbnb, as well as the cost of any software used to manage your listings (e.g., Smartbnb, Hostaway) are deductible.

The 15.3% Self-Employment Tax Surprise

Because you’re considered self-employed as an Airbnb host, you’re responsible for paying both the employer and employee portions of Social Security and Medicare taxes. This is known as self-employment tax.

You’ll calculate this on Schedule SE (Self-Employment Tax). The combined rate is 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). You only pay self-employment tax on profits over $400. The good news is you can deduct one-half of your self-employment tax from your adjusted gross income on Form 1040.

Closing Tip for Hawaii Residents

Navigating taxes as an Airbnb host in Hawaii can be complex, especially with the added layer of Transient Accommodations Tax. I strongly recommend keeping meticulous records of all your income and expenses throughout the year. Consider using accounting software designed for rental properties. And, if you’re unsure about any aspect of your tax obligations, consulting with a qualified tax professional (like myself!) who is familiar with Hawaii tax laws is always a wise investment. Mahalo and happy hosting!