VRBO Host Taxes in Utah - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for VRBO Hosts in Utah

Utah’s stunning national parks and ski resorts make it a premier destination for travelers, creating lucrative opportunities for VRBO hosts. However, alongside the income comes the responsibility of accurate tax reporting. Rental income generated through platforms like VRBO is generally taxable at both the federal and Utah state levels. Understanding these obligations is crucial for compliance and maximizing potential deductions.

Utah State Tax Rules for Rental Income

As a resident of Utah, a state income tax return is required regardless of the amount of rental income earned. Utah operates under a flat income tax rate, currently at 4.85% for the 2025 tax year. This means all taxable income, including rental income, is taxed at the same rate. Rental income is reported on your Utah individual income tax return, specifically using Form TC-1040, Utah Individual Income Tax Return. Self-employed individuals, including VRBO hosts reporting income on Schedule C at the federal level, will also need to file Schedule A with the TC-1040 to report business income. Utah also allows for deductions similar to those at the federal level, such as mortgage interest and property taxes, but these may be subject to limitations. It’s important to note that Utah conforms to many federal tax provisions, but not all. Therefore, staying updated on any differences is vital. The Utah State Tax Commission provides detailed information and resources for taxpayers, including guidance on rental income reporting. You can find more information at the Utah State Tax Commission website. Remember to keep meticulous records of all income and expenses related to your VRBO activity to support your tax filings. Failure to accurately report rental income can result in penalties and interest.

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 classifies rental activities differently, and the distinction has significant financial consequences.

• Schedule E (Passive Rental Income): Most casual VRBO hosts report their income and expenses on Schedule E (Supplemental Income and Loss). This applies if your involvement is primarily providing basic lodging. If you simply rent out a space and handle minimal services – such as basic cleaning between guests – you’ll likely fall into this category and are not subject to self-employment tax.
• Schedule C (Active Business Income): If you provide “substantial services” to your guests, the IRS considers your rental activity an active business. “Substantial services” can include daily cleaning, providing meals, offering concierge services, or generally operating more like a bed and breakfast. Reporting on Schedule C means your rental income is subject to the 15.3% self-employment tax (Social Security and Medicare).

Top Tax Write-offs for Utah Hosts

Maximizing deductions is key to minimizing your tax liability. Here are some common write-offs available to 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 and the number of days it was rented.
• Repairs, Maintenance & Cleaning: Expenses for repairing damage, routine maintenance (like plumbing or electrical work), and professional cleaning services are deductible. This also includes the cost of cleaning supplies.
• Depreciation: This is a powerful deduction that allows you to recover the cost of your rental property (or portions of it) over its useful life. It accounts for the wear and tear on your property. Depreciation can be complex, and consulting a tax professional is often recommended.