Airbnb Host Taxes in North Carolina - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Airbnb Host income taxable in North Carolina?

Yes, income earned as an Airbnb host is absolutely taxable, both at the federal and North Carolina state level. 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. Keep meticulous records of all income and expenses.

North Carolina Specific Rules: North Carolina has a flat income tax rate of 4.5% for the 2024 tax year (filing in 2025). Your net profit from Schedule C will be added to your other income and taxed at this flat rate. North Carolina generally follows federal adjusted gross income (AGI) calculations, so deductions taken on your federal return will typically flow through to your state return as well. You will file Form D-400 to report your North Carolina income tax.

Top Tax Write-offs for Airbnb Hosts

As an Airbnb host, you're entitled to deduct expenses that are "ordinary and necessary" for your business. Here are some key deductions:

• 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 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, gas, water, 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 services, repairs, and general maintenance of the rental property are deductible. This includes things like lawn care, plumbing repairs, and painting.
• Mileage & Vehicle Expenses: When you use your vehicle for Airbnb-related activities (e.g., grocery shopping for guest supplies, taking guests to/from the airport, maintaining the property), you can deduct either the actual expenses (gas, oil, repairs, etc.) or the standard mileage rate. For 2024, the standard mileage rate is 67 cents per mile. Keep a detailed mileage log!
• Airbnb Fees: The fees Airbnb charges you are a deductible business expense.
• Software & Subscriptions: Costs for software used to manage your Airbnb business (e.g., smart home devices, scheduling tools, accounting software) 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 your net earnings exceeding $400. The good news is that you can deduct one-half of your self-employment tax from your gross income on Form 1040.

Closing Tip for North Carolina 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. Don't hesitate to consult with a qualified tax professional – like myself – to ensure you're maximizing your deductions and complying with all federal and North Carolina tax laws. Proper planning can save you significant money and stress during tax season!