Photo by Vladimir Solomyani on Unsplash

If you are a host who uses Airbnb or other short-term rental websites to rent out a spare room or your entire home, you might want to carefully check that your taxes are filed correctly this year.

Safe to say, Airbnb has become the go-to service for consumers looking for an alternative to traditional hotels. At the same time, Airbnb allows hosts to earn additional income by short-term renting a house, apartment or spare room. But many hosts might not know that Airbnb earnings aren’t simply “free money.” In the U.S., hosts are required to pay taxes on short-term renting earnings – even if the host does not own the property.

To help demystify the specific tax rules that apply to Airbnb hosts, Nolo, a resource for legal guides and advice for consumers and businesses, recently published Every Airbnb Host’s Tax Guide. This first-of-its-kind tax guide is specifically written for short-term rental hosts by tax expert and attorney Stephen Fishman.

If your home or room was rented out for less than 14 days, you’re in luck, as any money you gained is completely tax-free. However, the majority of hosts rent rent out their places for longer than two weeks, so if that’s you, here are three of the most valuable takeaways for Airbnb hosts to save money this tax season, according to Fishman.

How the Tax Cuts and Jobs Act affects Airbnb hosts

The new tax law allows you to deduct expenses without it counting toward the personal deduction limit of $10,000. In addition, hosts are also able to deduct rental expenses like fees paid to a rental agency and the cost of cleaning and repairs on the space you are renting out.

What if you don’t report your short-term income to the IRS?

As you might suspect, there are consequences if you don’t report your income accurately, which Fishman warns can leave you with hefty fines.

“If you don’t report your short-term rental income and the IRS discovers it, you’ll have to pay taxes on the income, plus interest and penalties,” says Fishman. “You could have to pay a negligence penalty of 20% of what you underpaid. This can really add up.”

It’s not just Airbnb that is taxed

Lastly, don’t forget that the new tax laws apply to all short-term rental services, such as VRBO and HomeAway – not just Airbnb.

You can get 20% off Every Airbnb Host’s Tax Guide from the Nolo website by adding this code at checkout: bbanb20

Money-saving tips for Airbnb hosts this tax season