Tax Guide

STR Tax Deductions: What You Can Write Off

Short-term rentals have a different tax profile than traditional long-term rentals. More operational expenses, different passive/active income classification, and unique deduction categories mean STR owners often leave money on the table—or accidentally claim deductions they cannot support. This guide covers every major STR deduction, the rules that govern them, and the traps to watch for.

STR-specific deductions most owners miss

Beyond the standard rental deductions (mortgage interest, property taxes, insurance, depreciation), short-term rentals generate a long list of operational expenses that are fully deductible:

  • Cleaning fees: The cost of turnover cleaning between guests—one of the largest STR expenses. Fully deductible whether you hire a service or buy supplies.
  • Guest supplies: Toiletries, coffee, paper products, linens, towels, kitchenware, welcome baskets—anything provided for guest use.
  • Platform fees: Airbnb host service fees (typically 3%), VRBO fees, Booking.com commissions, channel manager subscriptions.
  • Professional photography: Listing photos, video tours, drone footage—deductible as advertising expenses.
  • Staging and furnishing: Furniture, decor, artwork, and staging items. Items over the de minimis threshold may need to be depreciated rather than expensed immediately.
  • Dynamic pricing software: PriceLabs, Wheelhouse, Beyond Pricing subscriptions.
  • Smart home technology: Smart locks, noise monitors, thermostats, security cameras for common areas.
  • Guest communication tools: Hospitable, Guesty, or other PMS (property management software) subscriptions.
  • Utilities: Electric, gas, water, internet, cable/streaming—typically landlord-paid in STRs, making them fully deductible.
  • Occupancy and lodging taxes: Taxes you pay to local jurisdictions are deductible as a business expense.

The 14-day rule and 10% rule

The IRS has two special rules that affect how STR income and deductions are treated:

The 14-day rule (tax-free rental income)

If you rent your property for fewer than 15 days during the tax year, you do not need to report the rental income at all. It is completely tax-free. However, you also cannot deduct any rental expenses for those days. This rule is popular with homeowners who rent during major events (sports championships, festivals) for a few nights at premium rates. See IRS Publication 527 for details.

The 10% personal use rule

If you also use the property personally, the IRS limits your deductions if personal use exceeds the greater of 14 days or 10% of the days the property is rented at fair market value. Exceed this threshold and your deductions are capped at your rental income—you cannot claim a net loss. For dedicated STR operators who do not personally use the property, this rule rarely applies. But if you block off weeks for personal vacation, track those days carefully.

Organizing your schedule

Active vs passive income for STRs

This is where STRs diverge significantly from long-term rentals. Under IRC Section 469(c)(2), a rental activity is generally passive. But there is an exception: if the average rental period is 7 days or less, the activity is not treated as a rental activity under the passive activity rules.

For most Airbnb and VRBO operators with average stays under 7 days, this means the income is classified as non-passive by default. This has two important consequences:

  • Losses can offset active income without needing REPS qualification—if you materially participate in the activity
  • Self-employment tax may apply (see below)

If your average rental period is between 7 and 30 days and you provide significant personal services, the activity may also be non-passive. The classification depends on the specific facts of your operation. This is an area where a CPA with STR expertise is essential.

Self-employment tax implications

When STR income is classified as non-passive (average stay under 7 days), there is a risk that it may also be subject to self-employment tax (15.3% for Social Security and Medicare). This depends on whether the IRS considers you to be running a “trade or business” rather than simply renting property.

Key factors that increase the likelihood of self-employment tax:

  • Providing substantial services to guests (daily cleaning, meals, tours, concierge services)
  • Operating more like a hotel than a rental property
  • High guest turnover with short average stays
  • Active day-to-day involvement in operations

If self-employment tax applies, income is reported on Schedule C rather than Schedule E. The silver lining: Schedule C allows you to deduct half the self-employment tax and potentially contribute to a Solo 401(k) or SEP IRA. Some STR operators structure their operations specifically to take advantage of this.

STR-specific activity categories for hour tracking

Short-term rental operators spend time on activities that traditional landlords do not. If you are tracking hours for REPS qualification or material participation, these STR-specific activities count:

  • Guest communications: Responding to inquiries, pre-arrival instructions, check-in coordination, mid-stay questions, check-out instructions, issue resolution
  • Turnover management: Scheduling cleaners, inspecting between guests, restocking supplies, laundry coordination
  • Pricing management: Adjusting nightly rates, reviewing market data, configuring dynamic pricing tools, setting minimum stays and seasonal rates
  • Review responses: Writing guest reviews, responding to reviews (both positive and negative)—this is property management, not marketing
  • Listing optimization: Updating descriptions, swapping photos, A/B testing titles, managing multiple platform listings
  • Regulatory compliance: STR permit applications, occupancy tax filings, zoning research, HOA communications

For the full breakdown of IRS-recognized activity categories, including how each maps to the material participation tests, see our dedicated guide.

How RE:Writeoff captures STR activities

STR operators generate a high volume of email activity: Airbnb booking confirmations, guest messages, cleaning team coordination, maintenance requests, platform payout notifications, and review alerts. RE:Writeoff connects to your Gmail and automatically identifies these as property management activities.

Each activity is classified by IRS category, linked to the right property in your portfolio, and stored with the original email as evidence. The result is a contemporaneous activity log that documents your STR management work as it happens—without manual data entry.

For operators who also manage long-term rentals, see our guide on STR vs LTR tax differences and tracking property management hours.

RE:Writeoff is a documentation tool and does not provide tax advice. Consult a qualified tax professional for advice specific to your situation.

References

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STR Tax Deductions: What Short-Term Rental Owners Can Write Off | RE:Writeoff — REPS Tax Savings | RE:Writeoff — REPS Tax Savings