If you have a short-term rental (e.g. Airbnb, VRBO, etc.) and you provide substantial services for the convenience of your guests, your short-term rentals might be classified as a self-employed (Schedule C) business activity which is subject to self-employment tax. If you don’t provide substantial services to your guests, then normally you can file on Schedule E for rental properties.

Below are some examples of insubstantial services and substantial services which will help you determine if your rental should be reported on Schedule C or Schedule E.

Insubstantial Services:

  • Water and Gas
  • Heating and A/C
  • Wi-Fi and Internet
  • Repairs
  • Cleaning of common areas
  • Maintenance
  • Payment of HOA dues
  • Trash Collection

Substantial Services:

  • Concierge services
  • Cleaning of the rental portion of the property while it is occupied
  • Meals and entertainment
  • Guest tours and outings
  • Transportation
  • Other hotel-like services

Feel free to connect if you need help determining if your short-term rental is a Schedule C or Schedule E type rental activity.