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Running a short-term rental (STR) is a lucrative venture, but taxes can eat into your profits if you’re not strategic. From federal income taxes to local occupancy taxes, STR hosts face a complex landscape that requires careful planning. In 2025, with tax codes evolving and IRS scrutiny on STRs increasing, smart tax strategies are essential to maximize deductions, minimize liabilities, and keep your business thriving. One powerful tool? The Augusta Rule, which can save you thousands. Here’s a guide to key tax strategies for STR hosts, including how to leverage the Augusta Rule, with NSTRA resources to support your financial success.

Why Tax Planning Matters for STR Hosts

STRs are businesses, subject to federal, state, and local taxes, including income tax on rental revenue and occupancy taxes (2-15% of bookings). A 2024 TurboTax study found that 65% of STR hosts overpay taxes due to missed deductions or improper filings. Effective tax planning can save you thousands annually, freeing...