Airbnb Host Taxes in Maryland - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Airbnb Host income taxable in Maryland?

Yes, income earned as an Airbnb host is absolutely taxable, both at the federal and Maryland state levels. The IRS considers Airbnb hosting a business activity, meaning you’ll need to report your earnings and expenses.

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 allows you to deduct all ordinary and necessary business expenses, ultimately determining your net profit or loss.

Maryland Specific Rules: Maryland has a graduated income tax system, meaning the tax rate increases as your income increases. Your net profit from Airbnb (after Schedule C deductions) will be added to your other income and taxed according to these graduated rates. Furthermore, Maryland also levies a local income tax, which varies by county and city. You’ll report your income on Maryland Form 502, and local tax will be calculated based on your residence.

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: Expenses like electricity, gas, water, and internet are deductible, again based on the percentage of time the property is rented. Keep detailed records!
• Cleaning & Maintenance: Costs associated with cleaning the property between guests, as well as repairs and maintenance (e.g., fixing a leaky faucet, painting) are fully deductible.
• Mileage: When you drive for Airbnb-related activities (e.g., delivering keys, shopping for supplies), you can deduct mileage. For 2024, the standard mileage rate is approximately 67 cents per mile (always verify the official IRS rate at IRS.gov). Alternatively, you can deduct actual car expenses (gas, oil, repairs, etc.), but the standard mileage rate is often simpler.
• Airbnb Fees: The fees Airbnb charges you are a deductible business expense.

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 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 tax on Schedule SE (Self-Employment Tax). The good news is you only pay self-employment tax on 92.35% of your net profit from Schedule C. You do get to deduct one-half of your self-employment tax from your gross income on Form 1040.

Importantly, self-employment tax applies to earnings over $400. If your net profit is less than $400, you won’t owe self-employment tax, but you still need to report the income.

Closing Tip for Maryland Residents

Navigating Airbnb taxes can be complex, especially with Maryland’s graduated income tax and local tax requirements. I strongly recommend keeping meticulous records of all income and expenses throughout the year. Consider using accounting software designed for self-employed individuals. Don't hesitate to consult with a qualified tax professional (like myself!) to ensure you’re maximizing your deductions and complying with all applicable tax laws. Proper planning can save you significant money and stress during tax season.