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.