Is a Lodging Tax Compliance Service Right for You?
For a monthly fee service providers such as MyLodgeTax calculate and submit occupancy taxes on behalf of hosts.
It’s not a hands-off solution, however. Hosts using such services must still gather the data related to their revenue along a specified timeline, login and submit the data, and make sure that sufficient funds are available in their connected bank account to cover the tax payments.
This might be a good option for the occasional host who is only offering rentals once or twice a month (making it easy to calculate revenue), who keeps a substantial cash reserve on-hand (to assure tax payments don’t bounce), and who isn’t interested in growing their business or getting involved in detailed Schedule C reporting at tax time.
However, if your airbnb hosting is a full-time business (or you want it to be), then you should be keeping detailed financial records about all of your financial transactions, including tax collection. Since the all the information you need for remitting taxes will already be fully captured fully within your accounting software, reporting and making payments directly to governing authorities may actually be a simpler and less time consuming than using a third party service provider.
Carpetbag Enterprises specializes in bookkeeping for airbnb hosts. Contact me if you’d like to discuss how Cb can help you manage the financial details like tax collection and remittance.
