Airbnb Host Taxes in Texas - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Airbnb Host income taxable in Texas?

Yes, even though Texas has no state income tax, income earned as an Airbnb host is absolutely taxable at the federal level. The IRS considers Airbnb hosting a business activity, and you’ll need to report your earnings and expenses using Schedule C (Profit or Loss From Business) when you file your federal income tax return (Form 1040). You’ll report your net profit (income minus expenses) on Schedule C, and that amount will then be included in your Adjusted Gross Income (AGI) on Form 1040.

Because Texas does not have a state income tax, you won’t file a state return reporting this income. However, you are still responsible for paying federal income tax and self-employment tax on your Airbnb profits.

Top Tax Write-offs for Airbnb Hosts

As an Airbnb host, you can significantly reduce your tax liability by claiming eligible business expenses. Here are some common 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 rented. 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 used for rental.
• Cleaning & Maintenance: Costs associated with cleaning services, repairs, and general maintenance (e.g., lawn care, plumbing) are fully deductible.
• Mileage: When you use your personal vehicle for Airbnb-related activities (e.g., grocery shopping for guest supplies, taking guests to/from the airport, cleaning supplies pick-up), you can deduct mileage. For 2024, the standard mileage rate is 67 cents per mile (verify the final official rate from the IRS). Keep a detailed log of your business miles!
• Airbnb Fees: The fees Airbnb charges you are a deductible business expense.
• Supplies: Items like toiletries, linens, and other guest supplies are deductible.

The 15.3% Self-Employment Tax Surprise

Many Airbnb hosts are surprised to learn about self-employment tax. When you work for an employer, they pay half of your Social Security and Medicare taxes. As a self-employed individual, you’re responsible for both the employer and employee portions. This combined tax is 15.3% (12.4% for Social Security and 2.9% for Medicare) on your net earnings from self-employment.

You’ll calculate this tax on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on profits over $400. You do get to deduct one-half of your self-employment tax from your gross income on Form 1040, which helps reduce your overall income tax liability.

Closing Tip for Texas Residents

As a Texas resident, you benefit from the lack of state income tax, but diligent record-keeping is crucial for maximizing 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 all the deductions you’re entitled to and staying compliant with IRS regulations. Good luck, and happy hosting!