VRBO Host Taxes in Wisconsin - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for VRBO Hosts in Wisconsin

Wisconsin’s beautiful lakes and charming towns make it a popular destination for vacation rentals, creating opportunities for hosts. However, income earned through platforms like VRBO is generally taxable at both the federal and Wisconsin state levels. Understanding these tax obligations is crucial for compliance and maximizing potential deductions.

Wisconsin State Tax Rules for Rental Income

As a resident of Wisconsin, a state income tax return is required regardless of the amount of rental income earned. Wisconsin utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Wisconsin residents reporting rental income as self-employment income will primarily use Form 400, the Wisconsin Income Tax Return, along with Schedule Z, which is used to calculate income or loss from a business (including rental properties treated as a business). It's important to note that Wisconsin generally conforms to federal tax law, but there can be differences, particularly regarding deductions and credits. Wisconsin also has a specific rule regarding the allocation of income for properties used both for personal and rental purposes. You must allocate income and expenses based on the number of days the property is rented versus used for personal enjoyment. Keep meticulous records of rental days versus personal use days. Furthermore, Wisconsin offers a Qualified Business Income (QBI) deduction, similar to the federal Section 199A deduction, which may reduce your taxable income. The specifics of this deduction can be complex and depend on your overall income level. Consulting with a Wisconsin tax professional is highly recommended to ensure accurate reporting and maximize available tax benefits. You can find more information and access tax forms on the Wisconsin Department of Revenue website: Wisconsin Department of Revenue.

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. If you fall into this category, 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" – think daily cleaning, providing meals, or acting more like a bed and breakfast – you report on Schedule C (Profit or Loss from Business). This triggers the 15.3% self-employment tax on your net rental income.

Top Tax Write-offs for Wisconsin 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 (like landscaping), and professional cleaning services. Supplies used for cleaning are also deductible.
• Depreciation: A powerful, but often complex, deduction that allows you to recover the cost of your rental property (and certain furnishings) over its useful life. This deduction often requires the assistance of a qualified tax professional to ensure proper calculation and reporting.