As an Airbnb host, you've furnished your property. But can you write off furniture for Airbnb on your taxes? The short answer is yes! However, understanding the specific rules and methods is crucial to maximize your deductions while staying compliant with tax regulations.
Furniture for your short-term rental (STR) property is usually a capital expenditure rather than an immediate expense. This means its cost is recovered over time through depreciation, though you can deduct it upfront through methods like Section 179.
This guide covers methods to legally deduct your Airbnb furniture costs, essential rules to follow, and record-keeping practices to support your deductions. Understanding these tax strategies is key to maximizing your STR profitability.
Companies like STR Cribs specialize in data-driven design and furnishing for STRs. They focus on items that balance aesthetics, durability, and guest appeal to maximize ROI. Their expertise helps hosts select furniture that delights guests and makes financial sense from a tax perspective.
Why Your Airbnb Furniture Matters
While stylish, comfortable furniture impacts guest experience, reviews, and booking rates, there's another dimension to consider: the financial investment. Quality furniture represents a significant portion of your STR startup or improvement costs.
Understanding the Internal Revenue Service (IRS) treatment of this investment is vital for effective tax planning and maximizing your return on investment. Choosing durable, guest-attractive furniture isn't just about aesthetics—it's a financial decision with tax implications.
Is Furniture an Expense or a Capital Asset?
To understand how to write off furniture for your Airbnb, you need to know how the IRS classifies business costs:
A deductible business expense is usually used up within a year—cleaning supplies, toiletries, or frequently replaced linens. These items can be deducted in full during the tax year they're purchased.
A capital expenditure, on the other hand, is something that provides benefits for over a year. Furniture falls into this category because it has a "useful life" extending beyond a single tax year. That dining table or sectional sofa is expected to serve your guests for years.
This classification is important because it determines how you can deduct the cost. Capital expenditures must be depreciated (cost spread over several years) rather than deducted entirely in the purchase year. Think of it like this: buying coffee for guests is an immediate expense; buying a coffee maker is a capital expenditure that benefits your business over multiple years.
Method 1: Depreciation – Spreading the Cost Over Time
Depreciation is the standard method for recovering the cost of capital assets like furniture. It allows you to deduct a portion of your furniture costs each year over its "useful life."
The IRS uses the Modified Accelerated Cost Recovery System (MACRS) as the primary depreciation system for tax purposes. Under MACRS, each asset type is assigned a recovery period – the duration the IRS considers that asset to be productive.
The typical recovery period for furniture in a residential rental property (including STRs) is 5 years under MACRS. This means you'll spread the deduction for your furniture purchases over 5 years, following specific percentage allocations for each year.
Here's how it works: If you purchase $10,000 worth of furniture, instead of deducting the entire amount in the purchase year, you'll deduct a portion each year for five years (not necessarily in equal amounts – MACRS has specific percentage tables).
To claim depreciation, you need to file IRS Form 4562, Depreciation and Amortization, with your tax return.
- Pros: The IRS-accepted standard method works for all business-use furniture regardless of cost.
- Cons: Deduction is spread over multiple years and requires complex tracking over time.
For guidance on depreciation calculations, refer to [IRS Publication 946 - How To Depreciate Property.
Method 2: Section 179 Expensing – Faster Tax Relief
Section 179 of the tax code offers an alternative to regular depreciation. This provision allows businesses to deduct the full purchase price of qualifying equipment and/or software bought or financed during the tax year, instead of depreciating it over several years.
For STR hosts, qualifying property typically includes tangible personal property used in your business, such as furniture, appliances, and certain fixtures. Instead of waiting five years to recover the cost through depreciation, Section 179 allows you to deduct the entire amount in the purchase year.
For the 2024 tax year, the maximum Section 179 deduction is $1,220,000 (adjusted annually for inflation) and an investment limit of $3,050,000, after which the deduction begins to phase out.
Key requirements for using Section 179:
- Property must be purchased (not leased).
- Must be used over 50% for business (Business Use Percentage)
- Must be placed in service (ready and available for use) during the tax year.
- The deduction can’t exceed your business income for the year.
Method 3: De Minimis Safe Harbor Election – For Smaller Items
The De Minimis Safe Harbor Election simplifies handling lower-cost asset purchases. Under this election, you can choose to immediately expense (rather than capitalize and depreciate) items that cost less than a specified threshold.
For most STR hosts (taxpayers without an Applicable Financial Statement), the per-item or per-invoice threshold is $2,500. This means any furniture item costing less than $2,500 can be deducted immediately in the year of purchase.
This approach is useful for smaller items like lamps, coffee tables, nightstands, or individual chairs that cost under the threshold. Instead of tracking depreciation for these items over multiple years, you can deduct them entirely in the first year.
At the beginning of the tax year, you must have a consistent accounting procedure in place and make the election annually with your tax return to use this election.
Remember, this is a per item or per invoice threshold, so proper documentation of individual costs is crucial.
Critical Rules & Considerations You Can't Ignore
When deducting furniture costs (via depreciation or Section 179), you're limited to the percentage of time the property is used for business (rented or actively available for rent) versus personal use.
For example, if you use your STR property for 10% of the year and rent it out (or have it available for rent) for 90% of the year, you can generally only deduct 90% of the furniture cost/depreciation.
This makes tracking rental days versus personal use days essential. The IRS scrutinizes this area closely, so maintain a detailed calendar showing when your property was:
- Rented to guests
- Available for rent and vacant
- Used personally by you, family, or friends (without paying market rate)
Placed in Service Date Matters
The placed in service date is when your furniture is ready for use in your rental activity—not necessarily the purchase date. This date determines the tax year for depreciation or Section 179 to begin.
For example, if you buy a sectional sofa in December 2024 but don't actually place it in your rental property until January 2025, the service date would be in 2025. This means you cannot claim deductions for it on your 2024 return.
Impeccable Record Keeping is Non-Negotiable
For furniture deductions, documentation is your best defense in an audit. Maintain:
- Invoices/receipts showing cost, purchase date, and detailed item description.
- Proof of payment (credit card statements, canceled checks)
- Records tracking business and personal use days
- Documentation of the "placed in service" date
- Photos of furniture in the rental property
- A detailed asset log tracking all furniture, purchase dates, costs, and depreciation schedules.
Potential for Recapture
Be aware of depreciation recapture and Section 179 recapture. If you claim Section 179 or accelerated depreciation and later sell the asset or stop using it for business before the end of its recovery period, you must report part of the previous deduction as income on your tax return.
For example, if you claim Section 179 on furniture and two years later convert your STR to personal use, you need to recapture a portion of the deduction.
Putting It All Together: Your Action Plan
To effectively write off your Airbnb furniture while staying compliant:
- Track all furniture purchases (cost, date, description).
- Document the days for the property that are for business use and personal use.
- Understand your options: Depreciation, Section 179, De Minimis Safe Harbor
- Crucially: Consult a qualified tax professional familiar with STRs/rental properties to determine the best strategy for your situation.
- Accurately file using the correct forms (e.g., Form 4562 for depreciation or Section 179).
- Consider the long-term financial impact when selecting furniture.
Conclusion
Yes, you can write off furniture for your Airbnb, and doing so correctly is a smart financial move that can significantly reduce your tax burden. Understanding these deduction methods improves your STR's profitability, whether you choose standard depreciation, Section 179 expensing, or the De Minimis Safe Harbor for smaller items.
Remember that following IRS rules, maintaining excellent records, and seeking professional tax advice are non-negotiable for a successful tax strategy. By controlling the financial aspects of your STR hosting—including furniture deductions—you build a more sustainable, profitable business.
Disclaimer: This article is provided for general informational purposes only and does not constitute tax, legal, or financial advice. The information presented is based on current tax rules, which are subject to change. Consult with a qualified tax professional (CPA, EA) before making any tax decisions based on this information. Tax situations vary widely, and the best approach depends on your specific circumstances.
