Airbnb Host Taxes in Washington - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Airbnb Host income taxable in Washington?

Yes, even though Washington State doesn't have a state income tax, your Airbnb income is still subject to federal income tax. The IRS treats Airbnb hosting as a business, meaning you'll report your income and expenses on Schedule C (Profit or Loss From Business) as part of your Form 1040. You'll calculate your net profit (income minus expenses) on Schedule C, and that net profit is then added to your overall income for federal tax purposes.

Washington State does have a capital gains tax, which could potentially apply if you sell the property you use for Airbnb hosting at a profit. This is a separate tax from your rental income and has its own rules and thresholds. Consult with a tax professional regarding the capital gains implications if you sell your property.

Top Tax Write-offs for Airbnb Hosts

• Mortgage Interest: If you own the property, you can deduct the mortgage interest you pay. This is a significant deduction for many homeowners.
• Utilities: A portion of your utilities (electricity, gas, water, internet, etc.) is deductible. You'll need to calculate the percentage of your home used exclusively for Airbnb rental. For example, if 20% of your home is dedicated to the Airbnb space, you can deduct 20% of your utility bills.
• Supplies & Consumables: Expenses for items provided to guests, such as toiletries (soap, shampoo), cleaning supplies, linens, and paper products are deductible.
• Mileage: Keep a detailed log of all miles driven for Airbnb-related activities (e.g., grocery shopping for guest supplies, cleaning appointments, trips to hardware stores for repairs). For 2024, the standard mileage rate is 67 cents per mile (verify the final official rate from the IRS). You can choose to deduct actual expenses (gas, oil, repairs) instead of mileage, but mileage is often simpler.
• Airbnb Fees: The fees Airbnb charges you are fully deductible.

The 15.3% Self-Employment Tax Surprise

Because Airbnb hosting is considered self-employment, 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 and 2.9% for Medicare) on your net earnings from self-employment (your Schedule C profit) exceeding $400. Don't be alarmed when you see this – it's a normal part of being self-employed! You can deduct one-half of your self-employment tax from your gross income on Form 1040.

Closing Tip for Washington Residents

While Washington State doesn't have an income tax, meticulous record-keeping is crucial for maximizing your federal deductions and minimizing your tax liability. Keep all receipts, mileage logs, and documentation related to your Airbnb business. Consider using accounting software designed for self-employed individuals. Finally, tax laws can be complex, so don't hesitate to consult with a qualified tax professional – like myself – to ensure you're complying with all applicable regulations and taking advantage of all available tax benefits.