Florida Rental Property Owners: Avoiding IRS Trouble on Short-Term Vacation Income

Short-term rental platforms like Airbnb and VRBO have become popular sources of income for Florida property owners. Whether you’re renting out a beachfront condo or a home near theme parks and other attractions, it’s crucial to understand how this income is taxed and what could trigger an Internal Revenue Service (IRS) audit.

Our experienced Florida tax-IRS attorney provides trusted legal guidance to rental property owners and explains how ignoring your tax obligations could lead to penalties, back taxes, or even a criminal investigation.

Reporting Requirements for Airbnb and Vacation Rentals in Florida

The IRS classifies income earned from short-term rentals as taxable. This includes rent received from platforms such as Airbnb, VRBO, HomeAway, or direct bookings. Under IRS rules, most hosts must report this income, even if they only rent for a few days a year.

According to federal law and IRS guidance, Florida rental owners must:

• Report all income received from short-term stays, even if paid in cash.
• Receive and review Form 1099-K or 1099-MISC from the platform if income exceeds reporting thresholds.
• Track deductible expenses, such as mortgage interest, repairs, utilities, and property management fees.
• Determine whether the activity is a business or passive income, which affects how taxes are calculated.
• Follow IRS guidelines on depreciation and personal use of the rental property.

In 2025, rental platforms must report gross payments over $5,000 to the IRS. Even if you don’t receive a 1099, you’re still responsible for reporting all income under federal law. Florida’s Department of Revenue also enforces state-level rules on sales and tourist development taxes, which apply to many short-term rentals.

Common Audit Triggers for Florida Vacation Property Owners

With new data-sharing rules and increased scrutiny on gig economy income, Florida vacation rental hosts face greater risks of an audit. The IRS now uses algorithms and third-party data to flag discrepancies in rental income reporting. Audit risks increase when:

• Reported income doesn’t match what platforms report to the IRS.
• Deductions appear excessive relative to the income earned.
• You personally use the rental, without properly prorating expenses.
• Hosts misclassify income or fail to issue required 1099s to service providers.
• Short-term rental activity is reported inconsistently from year to year.

Florida property owners may also face state inquiries if local lodging or sales taxes aren’t collected and remitted. Keep detailed records and work with an experienced Florida tax attorney to help avoid issues down the line.

To Protect Against Audits And Other Tax Problems With Rental Properties, Contact Florida Tax-IRS Attorney Ronald Cutler

Short-term rentals may seem simple, but the tax rules behind them are anything but. If you rent property in Florida through Airbnb, VRBO, or other platforms, staying on top of federal, state, and local reporting requirements is essential.

As a Certified Public Accountant and former FBI agent investigating tax matters, our Florida tax-IRS attorney helps Florida rental property owners navigate IRS audits, resolve reporting issues, and comply with evolving tax laws. To protect yourself and your rights, contact Ronald Cutler, P.A., and request a confidential consultation today.

Sources:

irs.gov/taxtopics/tc415

floridarevenue.com/Forms_library/current/brochure/gt800034.pdf

irs.gov/forms-pubs/about-form-1099-misc