12 Best Accounting Software for Rental Properties

You need to categorize each entry in your record, ensure the airbnb accounting accounts balance, and turn all this information into financial statements for tax authorities. Use a vacation rental accounting software like Baselane for unlimited bank and credit card connections. Tracking every financial transaction is where hosts usually fall off the rails. Your Airbnb tax report will only include gross earnings, withholdings, and adjustments for using the rental site. If you don’t want to foot the tax bill on your gross rental income, you’re responsible for keeping tabs on the rest.

Helpful Features to Look For in Accounting Software

Airbnb collects and pays certain occupancy taxes for hosts in specific jurisdictions. You may still be required to collect occupancy taxes in some areas manually. Self-employed individuals are generally required to make quarterly estimated tax payments to cover their income and self-employment taxes throughout the year. Stessa helps both novice and sophisticated investors make informed decisions about their property portfolio.

A free and simple short-term rental spreadsheet template

The reason handling funds this way is so important is because contra asset account it protects your company in the event that the guest cancels, shortens, or is otherwise granted a refund on their reservation. By holding the money outside of your company’s operating account until the date it can be transacted, you mitigate the risk of having to pay back money you may have already spent. Yes, it is possible to link Airbnb and Vrbo to QuickBooks using BnbTally.

• Airbnb is a great way to earn additional income by renting out a spare space in your home to guests.
• Some hosts may have problems with tax returns because their Airbnb accounting is based only on payouts received from the platform.
• When choosing the best accounting software for landlords, consider your specific needs, budget, and the level of automation you want.
• By meticulously recording all revenue streams and expenditures, Airbnb hosts can better understand their business performance.
• Tools that don’t fit your needs can hamper your ability to grow and achieve your goals.

Step 6: Utilize Tax Software

Among other things, commingling your business and personal funds can void personal liability protection. Open a bank account that’s dedicated to your rental properties, and also consider using a separate credit card. Expenses should be classified appropriately for every vacation rental property you own. For instance, if you own or manage 5 properties, you need to maintain separate books for each individual property separately without mixing up the revenue and expenses. It automates all of my Airbnb reservation accounting, it deals with multiple reservations in one payout and reservations with multiple payouts. It’s an administrative task in which financial transactions are recorded.

Keep accurate records

Stessa focuses on “rental property finances made simple,” and users can easily track rental performance, automate income and expense tracking, and manage and grow their portfolio from one location. The amazing thing about Stessa is that it’s 100% free and allows users to run unlimited monthly reports on their properties, Bakery Accounting making it a contender for the best accounting software for Airbnb. From tracking income and expenses to managing taxes and making data-driven decisions, accounting is at the heart of your business operations. And with the right accounting software, you can streamline these processes, save time and money, and focus on what matters most – providing an exceptional experience for your guests.

Many financial experts recommend setting aside 30-35% of your Airbnb income to cover your quarterly tax payments and annual tax liability. Airbnb may assist in collecting some of these taxes from your customers and forwarding them to the appropriate government authorities. Ultimately, the host is responsible for collecting these taxes from their guests and remitting them to their local authority. Tax forms are typically sent out by January 31st, either by mail or email. If you haven’t received a 1099 Form by that date, you can still proceed with filing your taxes. However, If the income you report differs significantly from the one recorded on your 1099-K or 1099-NEC, your tax return may be flagged for review.