Airbnb Host Taxes in New Jersey - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Airbnb Host income taxable in New Jersey?

Yes, income earned as an Airbnb host is absolutely taxable, both at the federal and New Jersey state levels. The IRS considers Airbnb hosting a business activity, and New Jersey follows suit. You are essentially running a small business, even if it's part-time.

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. Schedule C allows you to deduct all ordinary and necessary business expenses, ultimately determining your net profit or loss. Keep meticulous records of all income and expenses.

New Jersey Requirements: New Jersey has a graduated income tax system, meaning the tax rate increases as your income increases. The profit reported on your federal Schedule C will be transferred to your New Jersey income tax return (Form NJ-1040). This profit will be added to your other income (wages, investments, etc.) and taxed according to the current New Jersey tax brackets. New Jersey also allows for many of the same deductions as the federal government, but it's crucial to understand any state-specific differences (see the NJ Division of Taxation website for details).

Top Tax Write-offs for Airbnb Hosts

Maximizing your deductions is key to minimizing your tax liability. Here are some common write-offs for New Jersey 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, internet, and cable are deductible, again based on the percentage of time the property is rented.
• Cleaning & Maintenance: Costs associated with cleaning services, repairs, and general maintenance (e.g., plumbing, landscaping) are fully deductible.
• Mileage & Vehicle Expenses: When you use your vehicle for Airbnb-related activities (e.g., picking up guests, shopping for supplies), you can deduct either the actual expenses (gas, oil, repairs, insurance, depreciation) 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!
• Airbnb Fees: The fees Airbnb charges you are a deductible business expense.
• Supplies: Items provided for guests like toiletries, linens, and paper products are deductible.

The 15.3% Self-Employment Tax Surprise

Because you're considered self-employed, you're responsible for paying both the employer and employee portions of Social Security and Medicare taxes. This is known as 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'll calculate this on Schedule SE (Self-Employment Tax) and file it with your Form 1040. However, you get to deduct one-half of your self-employment tax from your adjusted gross income, which can help lower your overall tax bill. This tax applies to net earnings over $400.

Closing Tip for New Jersey Residents

Navigating Airbnb taxes can be complex. I strongly recommend keeping detailed records of all income and expenses throughout the year. Consider using accounting software designed for self-employed individuals. Furthermore, New Jersey has specific rules and regulations, so consulting with a qualified tax professional (like myself!) familiar with New Jersey tax law is a wise investment to ensure you're maximizing your deductions and complying with all requirements. Don't hesitate to reach out if you have further questions – I'm here to help!