Airbnb Host Taxes in Rhode Island - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Airbnb Host income taxable in Rhode Island?

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

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, the IRS generally requires reporting of all income.

Rhode Island Taxes: Rhode Island 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 your federal Schedule C) will be added to your other income (wages, investments, etc.) to determine your total Rhode Island taxable income. Rhode Island then applies its graduated tax rates to that total income. You’ll report your federal adjusted gross income (AGI) and any Schedule C profit on Rhode Island Form RI-1040.

Top Tax Write-offs for Airbnb Hosts

Maximizing your deductions is key to minimizing your tax liability. Here are some common write-offs for Rhode Island 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 for cleaning services, repairs, and general maintenance (e.g., painting, landscaping) are deductible.
• Mileage: The IRS allows you to deduct mileage for trips directly related to your Airbnb business. For 2024, the standard mileage rate is approximately 67 cents per mile (always verify the official IRS rate at IRS.gov). Keep a detailed mileage log!
• Software & Supplies: Fees for Airbnb platform fees, property management software, and supplies provided for guests (toiletries, linens, etc.) are deductible.

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).

The good news is you only pay self-employment tax on your net profit (after deducting business expenses). Also, you can deduct one-half of your self-employment tax from your gross income on Form 1040, which helps reduce your overall tax burden.

Closing Tip for Rhode Island Residents

Navigating Airbnb taxes can be complex. I strongly recommend keeping meticulous records of all income and expenses throughout the year. Consider using accounting software designed for self-employed individuals. And, if you're unsure about any aspect of your tax obligations, consulting with a qualified tax professional (like myself!) in Rhode Island can save you time, money, and potential headaches. Don't hesitate to reach out for personalized advice tailored to your specific Airbnb situation.