As a host, you’re required to pay taxes on your rental income. This includes the money you earn from renting out your property and any additional services you may provide, like meals or laundry services.
Remember that if you rent your space for 14 days or less during the year, you don’t have to pay tax on the income. But if it’s more than 14 days, you’re on the hook for taxes. As always, consult your tax advisor or accountant for professional advice from an expert.
Submitting Tax Forms
You must submit a Form W-9 to your rental platform. This is because they must withhold a percentage of your earnings if they don’t have your correct tax information.
Charging the Value Added Tax (VAT)
Now, let’s move on to compliance with VAT, or Value-Added Tax. In certain countries, you may need to charge VAT on the rental income you receive. Check your local regulations to see if this applies to you.
Staying on top of your tax obligations is important. You are responsible for understanding and complying with the rules applicable to your location. This may involve paying state, county, city, or local government taxes.
Here are a few tips to help you stay compliant:
- Research your local tax laws and regulations, or consult with a tax professional if unsure of your obligations.
- Keep accurate records of your rental income, including all bookings and payments.
- Don’t forget to include payment for any additional services you provide to your guests in your taxable income.
- File and pay your taxes on time to avoid penalties and interest charges.
By staying informed and organized, you can ensure that you’re meeting all your tax and legal obligations while enjoying the benefits of being a host on Lake.