How does the U.S. income tax process work for hosts?
As a Host, it is possible that your earnings could be subject to federal income tax.
Our role in this area of the relationship is to assist in the taxpaying process by collecting the required taxpayer information and submitting it to the IRS. For U.S. taxpayers, it is possible that we may require additional information to ensure that all withholding and reporting requirements are met.
In order to add your taxpayer information, simply go to My account > Tax information section in your profile:
- U.S. persons will need to complete the form W-9. Any of these individuals, whom earn more than $20,000 over 200+ transactions, should expect to receive a form 1099-K by the end of January following the tax year. It is worth noting that the U.S. tax code's definition of U.S. person includes corporations.
- A non-U.S. citizen who possess a U.S. taxpayer number, which can either be a social security number of an employer identification number, will have their income revealed on a W-8ECI, along with the form 1042-S, showing all earnings through U.S. listings. Non-U.S. citizens who do not possess a taxpayer number will be required to complete a W-BEN in order to certify their foreign status. The hosts who completed a form W-BEN will also receive a 1042-S. Unless the person has claimed certain treaty benefits that exempt them from having their earnings withheld, they will have the allotted amount withheld and recorded on the form 1042-S.
Why are you withholding taxes from my payouts?
If we have requested that you provide your taxpayer information, and you have failed to provide it to this point, we are required by law to withhold a portion of your earnings, at a rate of 28%, to be submitted to the IRS. This deduction can be avoided by providing the requested taxpayer information.
Once we have received all of the requested information, we will no longer withhold any amount of your future payouts; however, we will not be able to payout retroactively any amount that has already been remitted to the IRS. That money will have to come to you by way of tax refund. The total amount that has been withheld will be included on the tax form that you receive at the end of the tax year. It is in your best interest to consult a tax professional to discuss the withholdings to determine if you qualify for a refund, and how to file the correct forms to receive your refund.
Why must I provide my taxpayer information to misterb&b?
In the United States, companies are required by law to procure tax information on all hosts who appear to have income that is sourced in the U.S. You can provide your taxpayer information by going to your profile and clicking "My account", which will allow you to add the necessary tax information.
In certain instances, it may be necessary to collect taxpayer information, even if the person is not a U.S. citizen and have no U.S. listings. This information is gathered to confirm whether the earnings through misterb&b are subject to tax in the U.S.
Based on your tax status, which will be determined upon you submitting the necessary information, you will be provided with the appropriate tax form revealing your earnings for the year.
It is important for you to understand that regardless of whether you receive a tax form from us or not, it will be your responsibility to accurately report your taxable income to the IRS. We recommend that you consult a tax professional that will be able to advise you on the best way to report your income. You can also find some valuable information by reviewing the U.S. is IRS publication 527: Residential Rental Property.
If you are non-U.S. resident, and there have not been any valid treaty benefits claimed on your W-8BEN, misterb&b is required to withhold 30 percent of all payouts that result from U.S. listings. The total amount withheld will be remitted directly to the IRS. At the end of the year, you will receive a tax form 1042-S from misterb&b revealing the total amount withheld through the year.
What specific tax forms can I expect to receive from misterb&b?
- For individuals who completed and submitted a Form W-9 form : pursuant to Section 6050-W of the IRS code, the Hosts that have that have earned more than $20,000 through 200+ reservations will receive a Form 1099-K, showing all revenue earned through U.S. listings for the current tax year. If you have not reached both thresholds, we will not issue a Form 1099-K to you and will not report your income to the IRS. In case you reached both thresholds, we will send you the filled-out form 1099-k by email, and a copy to the address you provided on your misterb&b account. In any of this case, you stay responsible for declaring your revenue : read this official brochure to learn more about Form 1099-k.
- For individuals who completed and submitted a W-8 form, you will receive a 1042-S. If you have not received a tax form, you should review how the tax process works when it comes to rental property to determine whether you should be expecting a tax form. You also have the option to review and change information that you have already submitted in order to ensure that your information is current and accurate.
If you have questions as to which form you should complete, it is recommended that you contact a professional tax advisor to guide you through the process. Additionally, it is important that you understand that if we have requested taxpayer information, and you have not yet submitted it, we may be required to withhold a certain amount of your earnings until we receive the required information.
It is our expectation that all hosts are in complete compliance with all tax regulations in their area.