Airbnb Host Taxes in Virginia - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for Airbnb Hosts in Virginia

Virginia’s rich history and diverse landscapes, from the beaches of Virginia Beach to the mountains of Shenandoah, make it a popular destination for travelers, creating opportunities for Airbnb hosts. Revenue generated from short-term rentals through platforms like Airbnb is considered taxable income at both the federal and Virginia state levels. Understanding these tax obligations is crucial for compliance and maximizing potential deductions.

Virginia State Tax Rules for Rental Income

As a resident of Virginia, a state income tax return is required regardless of the amount of Airbnb income earned. Virginia operates on a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Virginia’s income tax rates range from 2% to 5.75%. Airbnb income is reported as part of your overall adjusted gross income (AGI). The primary form used to report self-employment income, including income reported on Schedule C, is Form 540, Virginia Individual Income Tax Return. Even if reporting on Schedule E, the net rental income (or loss) will flow to Form 540. Virginia also requires taxpayers to pay estimated taxes quarterly if they expect to owe $1,000 or more in state income tax. Failure to do so may result in penalties. It’s important to note that Virginia conforms to many federal tax provisions, but there can be differences, so staying updated on state-specific regulations is vital. The Virginia Department of Taxation provides detailed information and resources for taxpayers, including guidance on rental income reporting. You can find more information at the Virginia Department of Taxation website: https://www.tax.virginia.gov/. Keep meticulous records of all income and expenses related to your Airbnb activity to ensure accurate reporting and maximize potential deductions. Consider consulting with a qualified tax professional familiar with Virginia tax law for personalized advice.

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. The IRS classifies short-term 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 only provide basic lodging and cleaning between guests. If you are considered a passive rental, you are generally exempt from the 15.3% self-employment tax (Social Security and Medicare).
• Schedule C (Active Business Income): However, if you provide "substantial services" to guests – such as daily cleaning, providing meals, or offering concierge services – you report on Schedule C (Profit or Loss from Business). This classification means you are considered to be actively engaged in a business and must pay the 15.3% self-employment tax on your net earnings.

Top Tax Write-offs for Virginia 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 percentage of your home used for rental purposes and the number of days it was rented.
• Repairs, Maintenance & Cleaning: Deduct costs associated with repairing and maintaining the rental property, including plumbing, electrical work, and general upkeep. Professional cleaning fees and the cost of cleaning supplies are also deductible.
• Depreciation: A powerful but 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 your property. Calculating depreciation can be complicated, and it's often advisable to consult with a tax professional.