VRBO Host Taxes in Mississippi - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for VRBO Hosts in Mississippi

From the Gulf Coast beaches to the historic homes of Natchez, Mississippi’s hospitality is renowned, and short-term rentals are a growing part of that tradition. However, income earned through platforms like VRBO is generally taxable at both the federal and Mississippi state levels. Understanding these tax obligations is crucial for compliant and financially sound hosting.

Mississippi State Tax Rules for Rental Income

As a resident of Mississippi, a state income tax return is required regardless of the amount of rental income earned. Mississippi operates under a flat income tax rate, currently at 5%. This means all taxable income is taxed at the same percentage. Rental income is considered taxable income and must be reported on your Mississippi state income tax return. The primary form used for reporting self-employment and business income, including rental income reported on Schedule C at the federal level, is Form 83-101, Individual Income Tax Return. Even if reporting on Schedule E federally (passive income), the total rental income will still need to be included on Form 83-101. Mississippi does not have a separate tax form specifically for rental income; it's integrated into the standard individual income tax return. It’s important to accurately track all income and expenses related to your VRBO property to ensure correct tax reporting. Mississippi also allows for itemized deductions, which can potentially reduce your overall tax liability. Keep detailed records of all deductible expenses, as the state may request documentation to support your claims. For more information and access to tax forms, visit the Mississippi Department of Revenue website: https://www.dor.ms.gov/. Remember to consult the latest tax guidelines published by the Department of Revenue, as rates and regulations can change annually.

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

This is arguably the most important tax question for a VRBO host, as it directly impacts whether you owe self-employment tax. The IRS classification determines how your income is taxed and what deductions you can claim.

• Schedule E (Passive Rental Income): Most casual VRBO hosts report their income on Schedule E (Supplemental Income and Loss). This applies if you primarily provide lodging and minimal services – essentially, offering a place to stay and basic cleaning between guests. Reporting on Schedule E generally exempts you from the 15.3% self-employment tax (Social Security and Medicare).
• Schedule C (Active Business Income): If you provide “substantial services” to your guests, such as daily cleaning, providing meals, or offering concierge-type services, the IRS may consider your rental activity an active business. In this case, you must report income and expenses on Schedule C (Profit or Loss from Business) and are subject to the 15.3% self-employment tax.

Top Tax Write-offs for Mississippi Hosts

Maximizing your deductions is key to minimizing your tax liability. Here are some common write-offs for Mississippi VRBO hosts:

• Platform Fees: Fees charged by VRBO, Airbnb, 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 percentage of your home used for rental purposes. For example, if 20% of your home is rented, you can deduct 20% of these expenses.
• Repairs, Maintenance & Cleaning: Costs associated with repairing and maintaining your rental property, including professional cleaning services and cleaning supplies, are deductible. Routine maintenance is deductible; major improvements that increase the property's value are generally depreciated.
• Depreciation: This is a powerful deduction that allows you to recover the cost of your rental property (and certain furnishings) over its useful life. Depreciation can significantly reduce your taxable income, but it's a complex calculation. Professional tax assistance is often recommended.