Income tax

[The Markow House Gardens BnB]

Does anyone know where I can find the tax laws regarding BnB's where you live as well. Deductions renovations etc?

 

[gillumhouse]

I am a sole proprietor but I have listed my house with the Assessor's Office as 2/3 business and 1/3 residential. As such, I can claim 2/3 of my utility costs as business deductions. I also get to pay the highest rate possible for my real estate taxes. In West Virginia we have B & O taxes (Businwess & Occupation) on GROSS Revenue. Your best answer is to go to a tax preparer or CPA in your area to ask this question. Cities can have their own taxes (many cities in WV have an extra 1% sales tax), 1 other State has the B & O tax, and there are city fees (just not called taxes). Each State is different and somrtimes each county is different.

 

[Morticia]

If you are doing your own taxes talk to someone at a SCORE office. They often have retired CPAS volunteering there.
I really suggest you hire someone if this is your first year filing income tax. If you're a sole proprietor you have a couple of weeks left to file. If you're Incorporated, you're a month late.
Plus, whatever you set up this year, you need to continue doing. It's hard to change your tax filing status later on.

 

[OnTheShore]

You could read (and understand) all these publications from the IRS (or you could just hire an accountant to help guide you....)
IRS Publication 334 "Tax Guide for Small Business" -- https://www.irs.gov/pub/irs-pdf/p334.pdf
IRS Publication 535 "Business Expenses" -- this outlines what you can and cannot deduct as business expenses. The latest version is here: https://www.irs.gov/pub/irs-pdf/p535.pdf
IRS Publication 587 "Business Use of Your Home" -- https://www.irs.gov/pub/irs-pdf/p587.pdf
IRS Publication 946 "Depreciation of Property" -- the purchase price and renovations would have to be depreciated over time as capital investments, rather than directly deducted; https://www.irs.gov/pub/irs-pdf/p946.pdf
Assuming you are a sole proprietor, you will most likely be filing a Schedule C along with your form 1040 tax return. Schedule C is where you report all of your business income and business expenses, so it might be worth reviewing the instructions for that schedule as well to better understand what and you can and can't claim: https://www.irs.gov/pub/irs-pdf/i1040sc.pdf
I am assuming you don't have any employees or independent contractors working for you, even on a casual basis......
Good Luck!

 

[Morticia]

Or, buy the appropriate version of turbo tax.

 

[Tom]

Older US innkeepers: Remember, if you are a sole proprietor you are self employed and can deduct the cost of Medicare insurance payments (e.g. Part B, D) that were deducted from your social security benefits, goes on line 29 of 1040 Sch 1.
(And Turbo Tax didn't find that)

 

[Morticia]

Older US innkeepers: Remember, if you are a sole proprietor you are self employed and can deduct the cost of Medicare insurance payments (e.g. Part B, D) that were deducted from your social security benefits, goes on line 29 of 1040 Sch 1.
(And Turbo Tax didn't find that).

Good one!