Airbnb Host Taxes in Tennessee - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Airbnb Host income taxable in Tennessee?

Yes, even though Tennessee doesn't have a state income tax, income earned as an Airbnb host is subject to federal income tax. The IRS considers Airbnb hosting a business activity, and you'll report your earnings and expenses on Schedule C (Profit or Loss From Business) as part of your Form 1040. This means you'll calculate your net profit (income minus expenses) and that profit will be added to your other income when determining your overall federal tax liability.

Because Tennessee has no state income tax, you won’t file a state income tax return related to your Airbnb income. However, you may be subject to local taxes depending on your county and city. Check with your local government for specific requirements regarding business licenses or local occupancy taxes.

Top Tax Write-offs for Airbnb Hosts

As an Airbnb host, you can significantly reduce your tax burden by claiming eligible business expenses. Here are some key deductions:

• Mortgage Interest or Rent: If you own your property, you can deduct the portion of your mortgage interest that corresponds to the time the property is used for rental. If you rent your property, a portion of your rent may be deductible. This is typically calculated based on the percentage of the property used for rental purposes.
• Utilities: Expenses like electricity, gas, water, internet, and trash removal 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., lawn care, plumbing) are fully deductible.
• Mileage & Vehicle Expenses: When you use your vehicle for Airbnb-related activities (guest pick-up/drop-off, grocery shopping for guest amenities, trips to the hardware store for repairs), you can deduct either the actual expenses (gas, oil, repairs, insurance, depreciation) 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.
• Supplies: Items provided for guests like toiletries, linens, and kitchen supplies are deductible.

The 15.3% Self-Employment Tax Surprise

Many Airbnb hosts are surprised to learn about self-employment tax. When you work as an independent contractor (which you are as an Airbnb host), you're responsible for both the employer and employee portions of Social Security and Medicare taxes. This combined tax is 15.3% (12.4% for Social Security and 2.9% for Medicare) on your net earnings from Schedule C.

You'll calculate this tax on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on 92.35% of your net profit. The good news is you can deduct one-half of your self-employment tax from your gross income on Form 1040, which helps reduce your overall tax liability.

Remember, self-employment tax applies to earnings over $400.

Closing Tip for Tennessee Residents

As a Tennessee resident, you benefit from not having state income tax. However, diligent record-keeping is crucial to maximize your federal tax savings as an Airbnb host. Keep detailed records of all income and expenses, including receipts and mileage logs. Consider using accounting software designed for self-employed individuals. Consulting with a qualified tax professional (like myself!) can ensure you're taking advantage of all available deductions and complying with all IRS regulations.