What’s considered a short-term rental?
Any vacation rentals or rental units rented for 31 consecutive days or fewer are considered short-term rental properties. However, this rule may be different in each county. For instance, in Washoe County, a STR is 28 days.
When you rent a vacation property, like a home or residential unit, you are entering into a lease agreement temporarily. For tax purposes, the person renting out the STR collects all local lodging taxes and reports them during tax season.
Tax laws can vary from county to county. Depending on where the STR is located, it’s important for the host and guest to understand their tax responsibilities based on local rental laws.
When should I report the rental income for my STR?
The deadline to file and settle your taxes on all taxable income is April 15, 2024. For the most part, all state taxes are due on April 14, 2024. If you filed on time and anticipate a refund, you can expect to receive your funds in 21 days.
Do I always need to report rental income?
Under the 14-day rule, you are not obligated to report your rental income if you rent out your apartment, unit, or home for less than 14 days annually. Though the 14-day rule applies to everyone, platforms like Airbnb, HomeAway, or VRBO might report rental income to the IRS on Form 1099-K. If you include additional income on your tax return, subtract it as a qualifying 14-day exception adjustment.
The tax applied to room rentals is known as Lodging Tax. In Nevada, the rates for transient lodging tax and exemptions are determined at the city or county level, and these transient lodging taxes can change by county. The transient lodging tax in Las Vegas is 13%. Clark County collects an additional 0.05% room tax.
How do I report rental income for my short-term rentals?
Having your rental activity receipts and logs handy, including rental periods and any services, maintenance, and repairs included, will keep you organized and expedite reporting your taxes. Use Schedule E (Form 1040) to report rental income on all your properties.
Follow these steps to report your rental income efficiently.
Step 1: Gather the proper forms
Here is a list of forms you’ll need if you are filing for taxes on a STR and using online platforms like Airbnb and VRBO:
- Property taxes
- W-9 Form
- Receipts from rental periods
- Documentation of cleaning, maintenance, and repair services
- Travel expenses
For a comprehensive breakdown of reporting rental income, check out our Guide to Reporting Rental Income: How to File a Schedule E.
Step 2: Decide if your short-term rental income is active business income or passive rental
Operating a rental property typically qualifies as passive income since, unlike a traditional nine-to-five job where you dedicate a fixed amount of hours each week, you usually invest only a minimal amount of time each month in managing a rental, whether the rental is occupied on a fixed term, periodic term, or vacation rental.
Real estate professionals who spend at least 750 hours annually on real estate work-related activities can save thousands of dollars in taxes. You don’t necessarily have to have a real estate license. The Internal Revenue Service (IRS) only wants valid documentation on the work completed.
Step 3: Filing your income taxes
Consulting with a real estate professional or accountant can help you maximize your refunds. The IRS recommends sticking to a 1040 form for tax filings, yet if you use platforms like Airbnb, opt for a W-9 form to collect information from the online platform before filing for taxes. Using a W-9 form can also prevent Airbnb from withholding your rental income.
Key tax deductions for short-term rentals
Landlords are permitted to deduct all vacation rental-related expenses within reason, used in the same vein of maintenance and rental costs:
- Insurance premiums
- Property taxes
- Repairs to the property
- Travel costs
- Cleaning and seasonal maintenance
Use this template to help track your rental expenses.
FAQ: Tax guide for Nevada short-term rentals
Yes, all property owners must pay taxes on their rental properties unless the homes or units are occupied for less than a week every year. Property owners can enjoy tax-free profits earned from a STR rented less than 14 days annually.
Nevada doesn’t have a set statewide tax. However, each city or county can impose their transient lodging taxes on a short-term rental, which is why it’s imperative to understand the laws of the county where you’re operating your STR.
According to Airbnb, the Transient Occupancy Tax is between 13–13.38% of the listing price in Las Vegas. In Washoe County, Sparks, and Reno, transient lodging taxes are 13.5%.
Our final thoughts
By filing taxes correctly and maximizing deductions, taxpayers can minimize their tax liabilities and increase their chances of gaining bigger refunds. Review our guide on the essential differences for rental property owners to determine whether to manage a long-term rental or STR. Learn about all of the required documents every landlord needs to manage a rental.
