VRBO Host Taxes in Orlando, Florida - 2026

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for VRBO Hosts in Orlando, Florida

Orlando’s vibrant tourism industry makes it a prime location for short-term rentals, but success as a VRBO host also means understanding the tax implications. Rental income is generally taxable at both the federal and state levels, even if you only rent your property for a portion of the year. Careful record-keeping is essential to maximize deductions and ensure compliance.

Florida State Tax Rules for Rental Income

Florida is unique in that it does not have a state income tax. This means you won’t be filing a Florida state income tax return reporting your VRBO income. However, this doesn’t mean you’re off the hook entirely. While you get to skip filing a state income tax return, remember that Florida's high tourism can lead to more aggressive federal audits for cash-based gig work, especially in cities like Miami and Orlando. The IRS scrutinizes income from short-term rentals due to the potential for underreporting. Staying compliant with IRS rules is crucial. Furthermore, even without state income tax, you are still responsible for paying any applicable sales tax collected and remitted through platforms like VRBO. Orlando, with its high demand and competitive market, often sees hosts offering amenities or services that could push them into "active business" territory (see section 2), increasing their tax obligations. Local ordinances regarding short-term rentals are also evolving in areas like Kissimmee and near the theme parks; staying informed about these regulations is vital. You can find information about registering your business in Florida through the Florida Department of State, Division of Corporations (Sunbiz.org): Sunbiz.org.

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

This is the most important tax question for a VRBO host, as it determines if you owe self-employment tax. The IRS classifies rental activities differently, impacting your tax liability.

• 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. Think of it as simply providing a place to stay.
• Schedule C (Active Business Income): However, if you provide "substantial services" (daily cleaning, meals, providing toiletries beyond basic soap, concierge services), you report on Schedule C and must pay the 15.3% self-employment tax. This is treated as running a business, not just renting property.

Top Tax Write-offs for Orlando, Florida Hosts

Maximizing deductions is key to reducing your tax burden. Here are some common write-offs for VRBO hosts in Orlando:

• Platform Fees: Fees from Airbnb, VRBO, etc., are fully deductible. These are considered expenses directly related to generating rental income.
• Mortgage Interest & Property Taxes: Deduct the portion of your mortgage interest and property taxes that corresponds to the rental space and the period it was rented. If you rent out a room in your primary residence, you’ll need to calculate the percentage of the home used for rental purposes.
• Repairs, Maintenance & Cleaning: Deduct costs for fixing items (leaky faucets, broken appliances), professional cleaning services, and cleaning supplies. Routine maintenance is deductible; major improvements that increase the property's value are depreciated. Orlando’s humidity can lead to more frequent maintenance needs, so keep detailed records.
• Depreciation: A powerful but complex deduction for wear and tear on your property. This allows you to deduct a portion of the property's cost over its useful life. Often requires a tax professional to calculate correctly.