VRBO Host Taxes in Georgia - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for VRBO Hosts in Georgia

Georgia’s hospitality scene is booming, with short-term rentals playing a significant role in welcoming visitors to cities like Savannah and Atlanta. Revenue generated from your VRBO property is considered taxable income by both the federal government and the state of Georgia. Understanding these tax obligations is crucial for compliant and financially sound hosting.

Georgia State Tax Rules for Rental Income

As a resident of Georgia earning income from a VRBO property, filing a state income tax return is required, even if no federal tax is due. Georgia operates under a flat income tax rate system. For the 2025 tax year, the current flat tax rate is 5.49%. This rate applies to all levels of taxable income. Georgia utilizes Form 540, Individual Income Tax Return, as the primary form for reporting income, including self-employment income. Rental income is reported on Schedule 1 of Form 540. It’s important to note that Georgia also requires the payment of estimated taxes quarterly if your tax liability exceeds a certain threshold. Failure to pay estimated taxes can result in penalties. Furthermore, local governments in Georgia may impose hotel/motel taxes or occupancy taxes on short-term rentals. Hosts are responsible for collecting and remitting these taxes to the appropriate local authorities. Detailed information regarding local tax requirements can vary significantly by county and city, so diligent research is essential. Keep meticulous records of all rental income and expenses, as these will be necessary to accurately complete your state tax return. The Georgia Department of Revenue provides resources and guidance for taxpayers, including information on estimated taxes and local tax obligations. You can find more information at the Georgia Department of Revenue website: https://dor.georgia.gov/

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 whether you owe self-employment tax. The IRS classifies rental activity based on the level of services provided.

• Schedule E (Passive Rental Income): Most casual hosts report on Schedule E (Supplemental Income and Loss). This applies if you primarily provide basic lodging and cleaning between guests. Reporting on Schedule E generally exempts you from the 15.3% self-employment tax.
• Schedule C (Active Business Income): However, if you provide "substantial services" – think daily cleaning, providing meals, or offering concierge-style services – you are considered to be actively running a business. In this case, you report on Schedule C (Profit or Loss from Business) and must pay the 15.3% self-employment tax on your net earnings.

Top Tax Write-offs for Georgia Hosts

• Platform Fees: Fees charged by Airbnb, VRBO, and other platforms are fully deductible as business expenses.
• Mortgage Interest & Property Taxes: You can deduct the portion of your mortgage interest and property taxes that corresponds to the rental space and the period it was rented. If the property is used for both personal and rental purposes, you must allocate these expenses accordingly.
• Repairs, Maintenance & Cleaning: Deduct costs associated with fixing items on the property, routine maintenance, and professional cleaning services. Distinguish between repairs (deductible) and improvements (capitalized and depreciated).
• Depreciation: A powerful, but often complex, deduction that allows you to recover the cost of your rental property over its useful life. This deduction accounts for the wear and tear on the property. Consulting with a tax professional is highly recommended to ensure proper calculation and reporting of depreciation.