Airbnb Host Taxes in Los Angeles, California - 2026

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for Airbnb Hosts in Los Angeles, California

Operating an Airbnb in the vibrant city of Los Angeles presents unique opportunities, but also introduces specific tax considerations. Revenue generated from short-term rentals is generally considered taxable income at both the federal and California state levels. Understanding these obligations is crucial for compliance and maximizing potential deductions.

California State Tax Rules for Rental Income

As a resident of California, even if your Airbnb property is located elsewhere, you are required to file a California state income tax return. California operates on a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, the primary form for reporting self-employment income, including Airbnb rental income reported on Schedule C, is Form 540. Rental income reported on Schedule E is also reported on Form 540. California closely follows federal guidelines regarding deductible expenses, but it's important to be aware of potential differences. For example, California has specific rules regarding the deductibility of certain business expenses. The Franchise Tax Board (FTB) provides detailed information and resources for taxpayers. Given the high demand for short-term rentals in areas like Hollywood, Santa Monica, and Downtown Los Angeles, careful record-keeping is essential to accurately calculate your income and expenses. Furthermore, Los Angeles has specific regulations regarding short-term rentals, and compliance with these regulations can impact your tax obligations. It's important to stay informed about any changes to these local ordinances. California also has a minimum franchise tax, even if no income tax is due. Consulting with a qualified tax professional familiar with California and Los Angeles rental regulations is highly recommended to ensure full compliance and optimize tax savings. The FTB website is a valuable resource: California Franchise Tax Board.

The Critical Tax Question: Are You a Business or a Rental?

This is the most important tax question for an Airbnb host, as it determines if you owe self-employment tax.

• Schedule E (Passive Rental Income): Most casual hosts report on Schedule E (Passive Income) and are exempt from Self-Employment Tax. This applies if you only provide basic lodging and cleaning between guests. For example, simply providing a clean space and key access typically falls under Schedule E.
• Schedule C (Active Business Income): However, if you provide "substantial services" (daily cleaning, meals, concierge services, providing toiletries beyond basic soap), you report on Schedule C and must pay the 15.3% self-employment tax. Offering a daily breakfast or actively managing guest itineraries would likely qualify as substantial services.

Top Tax Write-offs for Los Angeles, California Hosts

• Platform Fees: Fees from Airbnb, VRBO, etc., are fully deductible. These can add up quickly, especially in a competitive market like Los Angeles.
• Mortgage Interest & Property Taxes: Deduct the portion corresponding to the rental space and period. If your property is used for both personal and rental purposes, you'll need to allocate these expenses accordingly.
• Repairs, Maintenance & Cleaning: Deduct costs for fixing items (leaky faucets, broken appliances), professional cleaning, and supplies. Los Angeles properties, particularly older buildings, may require more frequent maintenance.
• Depreciation: A powerful but complex deduction for wear and tear on your property. Often requires a tax professional. This allows you to deduct a portion of the property's cost over its useful life.