This is where I risk being permanently banned from the forums for excoriating a fellow host.
NO.... You do NOT have that correct. You do not have ANY of that correct. But.... you are in business.
You are in business, and you don't even know what you are doing.
AirBnB is NOT taking any taxes out of your income and forwarding them to anyone on your behalf. You are an independent contractor. YOU are responsible for reporting every single PENNY of income you received through AirBnB to the IRS and your State Tax authority when you file your State and Federal Income Tax Returns. YOU are responsible for paying the income taxes due at time of filing. Most self employed people make Quarterly Payments to the IRS (and State) throughout the year to cover the estimated amount of tax they are going to owe the government when they file their annual taxes. Uh... Yeah.... you should be making contributions to Social Security at the same time as well.
That Twenty Thousand Dollar thing you're thinking about.... ??? That's AirBnB's brilliant recognition that they're not obligated to send you a physical copy of an IRS form 1099 at the end of the year unless you exceed that threshold. It's a little less paperwork for them, but they're still obligated to report every penny they sent you to the IRS. The IRS is still going to know how much income you received through AirBnB last year... They don't care whether you earned that income through two guests or two thousand guests. The number of guests means nothing to them. They don't count guests.... They count pennies. And they know how many pennies AirBnB sent you. They're expecting you to tell them how many pennies you received over the course of the year through every income source. And they're expecting you to pay the taxes due on that income you received.
You're not alone. There are plenty of people in this world who receive bad information from people who don't know what they're talking about.... and they run with it. My Brother-in-law was doing "Handyman" work on the side for a number of years after he married my sister. He wasn't a very good "Handyman" but he did it for the Cash. He told my Dad that the thing he enjoyed most about it was that because people paid him in cash, he wasn't required to report it to the IRS, or pay any taxes on it. "Everyone knows you don't have to pay Income Tax when you're paid in Cash... It's the law" My father called him an Idiot.
