Key Takeaways
- December 31 is the hard deadline for placing bonus depreciation assets in service, expense acceleration, and personal use day corrections (Source). None of these moves can be made retroactively.
- The One Big Beautiful Bill restored 100% bonus depreciation for STR assets with a recovery period of 20 years or less placed in service in 2026 (Source). The asset must be in service by December 31.
- The IRS Section 280A personal use limit is the greater of 14 days or 10% of your total rental days. Check your count now, before it is too late to fix it.
- If you owe at least $1,000 in tax after subtracting your withholding and refundable credits, you can owe a penalty (Source). The Q4 estimated payment is due January 15, 2027, and you can still catch up.
- The 1099-K threshold for 2026 is $20,000 and more than 200 transactions (the OBBBA reversed the $600 rule). All STR income is taxable whether or not you receive a form.
December 31 is 54 days away. That is not a lot of time, but it is enough to do five things that could reduce your 2026 tax bill by a meaningful amount or save you from a penalty you did not see coming. For short-term rental investors, the end of the year is not a passive event. It is a decision point, and several of the most valuable decisions available to you have hard deadlines that cannot be extended, negotiated, or retroactively applied. Miss them and they are gone.
This is not a comprehensive tax guide. It is a checklist. Five specific moves, each with a clear deadline and a one-sentence action step. Work through them before the calendar flips and you will be in better shape than most of your peers, who are waiting until April to discover what they should have done in December.
This article provides general information and should not be construed as legal advice. Consult a qualified attorney or CPA in your jurisdiction for advice specific to your situation.
Move 1: Confirm Your Bonus Depreciation Election on 2026 Purchases
Deadline: December 31, 2026
If you purchased an STR property in 2026, or placed qualifying personal property (furniture, appliances, landscaping, fencing, and similar short-lived assets) into service this year, you may be entitled to 100% first-year bonus depreciation on those assets. The One Big Beautiful Bill Act, signed July 4, 2025, permanently restored the 100% rate under IRC Section 168(k) for qualifying property acquired and placed in service after January 19, 2025 (Source). That reversed the phase-out schedule that had been slowly taking bonus depreciation down toward zero.
The catch is the phrase “placed in service.” An asset must be physically ready and available for use in your rental business by December 31, 2026 for the deduction to apply to your 2026 return. A property you purchased in December but have not yet made available to guests will not qualify this year. A piece of furniture you ordered in November and received in January will not qualify either.
Picture this: You bought a mountain cabin in September, spent October and November doing renovations, and listed it on Airbnb for the first time in mid-December. That property was placed in service in December 2026. The bonus depreciation clock started in December 2026. Your cost segregation engineer can identify the short-lived assets in that cabin, and you can potentially write off a substantial portion of those assets on your 2026 return.
What to do before December 31: Confirm with your CPA or tax preparer that any qualifying property you placed in service this year is properly documented. Keep receipts, photos with dates, and evidence of the first guest booking. For a deeper look at what the OBBBA changed and how the election works, see our full guide on STR bonus depreciation 2026.
Move 2: Accelerate Deductible Expenses Into 2026
Deadline: December 31, 2026
If you use cash-basis accounting (which applies to most individual STR investors), expenses are deductible in the year you pay them, not the year they come due. That means anything you pay before midnight on December 31 can go on your 2026 return. Anything you pay January 1 goes on your 2027 return.
This is not about manufacturing deductions. It is about timing ones you were going to incur anyway. The question is whether it makes sense to pull them forward based on your expected tax bracket this year versus next. If you had a strong revenue year in 2026 and expect a quieter 2027, pulling expenses into 2026 reduces your higher-income year’s taxable income. If 2027 looks like it will be a bigger income year, the math reverses.
Expenses worth considering before December 31 include: property management software subscriptions you can pay annually, professional memberships and education, property maintenance or repairs you have been deferring, cleaning supplies and linens, annual insurance premium renewals, and advertising or listing fees. The IRS does allow prepayment of certain recurring expenses up to 12 months in advance without requiring capitalization, though the rules have nuances (yes, another layer of fine print, but at least it is a nuance that could save you money).
What to do before December 31: Pull up your outstanding invoices and your December bank statement. Identify any legitimate business expense you can pay in the next few weeks rather than January. Write a check or initiate a payment before year-end. Document everything. See our detailed breakdown of what qualifies in our guide to short-term rental tax deductions.
Move 3: Review Your Personal Use Day Count for IRS Section 280A Compliance
Deadline: December 31, 2026
IRS Section 280A establishes a threshold that determines how the IRS classifies your STR property: as a rental property or as a “vacation home.” The classification has significant consequences for which expenses you can deduct and in what amounts.
The rule works like this: if you use the property for personal purposes for more than the greater of 14 days or 10% of the total days it was rented at fair market value, the IRS considers it a vacation home. As a vacation home, your ability to deduct rental losses is severely limited, and the deduction rules become considerably less favorable.
“Personal use” is defined more broadly than most investors realize. It includes days you use the property yourself, days any family member uses it, and days when you rent it at below fair-market rates. If you let your college roommate stay there for a week at a discounted rate because you felt bad saying no, those are personal use days (yes, the IRS counts favors).
If you have been using the property for personal stays in 2026, now is the time to count. If you are close to the 14-day or 10% threshold, you may still have time to log additional rental days before December 31 to bring your personal use percentage below the limit. If you have already crossed it, you need to understand the deduction consequences before filing.
What to do before December 31: Pull your calendar for 2026 and log every personal use day. Compare that count against the 14-day threshold and the 10% rental threshold. If you are near the line, talk to your CPA before the year ends. For a full analysis of how Section 280A applies to STR investors, see our guide on short-term rental personal use rules and IRS Section 280A.
Move 4: Verify Your Estimated Tax Payments Are Current
Deadline: January 15, 2027 (Q4 payment)
STR investors who operate as sole proprietors, single-member LLCs, or partners in a partnership are generally required to make quarterly estimated tax payments throughout the year. The IRS does not wait until April to collect taxes on self-employment income. If you have been receiving STR revenue in 2026 without withholding, you may have a balance due, and if that balance is at least $1,000, you face an underpayment penalty on top of the tax you owe (Source).
The penalty is calculated per Form 2210 (a document with a certain government-form charm to it). The good news is that the penalty does not apply if you meet one of the safe harbor tests: you paid at least 90% of your 2026 tax liability through withholding and estimated payments, or you paid 100% of your 2025 tax liability (110% if your 2025 adjusted gross income exceeded $150,000).
The Q4 estimated tax deadline is January 15, 2027, not December 31. This gives you a few additional weeks to calculate what you owe and make a catch-up payment if needed. That said, if you missed Q1, Q2, or Q3 payments, the penalty on those underpayments has already accrued. Making a larger Q4 payment will cover the balance due but will not eliminate the penalty for the earlier quarters.
What to do before January 15: Pull your year-to-date STR income from all platforms. Add any other income sources subject to estimated taxes. Estimate your total 2026 tax liability. Compare what you have paid so far in estimated taxes and withholding. If you are short by at least $1,000, make a Q4 estimated payment on IRS Direct Pay before January 15 (Source). If you are significantly short across multiple quarters, ask your CPA whether filing early and paying in full by January 15 reduces the total penalty owed.
Move 5: Get Clear on Your 1099-K and Occupancy Tax Records Now
Deadline: December 31 for internal recordkeeping
Here is a data point worth knowing before you assume your Airbnb income is fully captured on the form the platform sends you: the 1099-K threshold for 2026 is $20,000 and more than 200 transactions, not $600. The American Rescue Plan Act of 2021 had tried to lower the threshold to $600, which would have meant far more hosts received a formal 1099-K. That provision was reversed by the One Big Beautiful Bill Act, which restored the original threshold.
What that means practically: many STR hosts will not receive a 1099-K from Airbnb, Vrbo, or other booking platforms for 2026 activity, because they did not cross both the dollar and transaction thresholds. Platforms may still issue one voluntarily below those limits, but they are not required to.
This is not a gift from Congress. The absence of a 1099-K does not change your obligation to report the income. The IRS expects you to report every dollar of STR revenue on your tax return regardless of whether you receive a form confirming it. What the new threshold does is change what information the IRS receives directly from platforms, which makes your own recordkeeping more important, not less.
Beyond 1099-K forms, now is the time to gather your occupancy tax and transient accommodations tax documentation. If your platform collected and remitted lodging taxes on your behalf in 2026, make sure you have records of those amounts. If you were responsible for collecting and remitting occupancy taxes yourself (which still applies in some markets), verify your 2026 submissions are complete before the year closes.
What to do before December 31: Run a full year-to-date income summary from each platform you used in 2026. Export transaction histories for Airbnb, Vrbo, and any direct booking channels. Compile a record of occupancy taxes collected and remitted. Store these in a folder you will not have to hunt for in February.
Frequently Asked Questions
Do I need a CPA to take these year-end tax moves?
You do not need a CPA to run a personal use day count or pull your platform income summary. Those are administrative tasks you can handle yourself. Where professional help genuinely earns its fee is on the bonus depreciation election and estimated tax calculations, particularly if you placed a new property in service this year or if your income changed significantly in 2026. A CPA who works with real estate investors can also identify whether cost segregation makes sense for your situation, which could substantially increase your first-year write-off. At minimum, loop in a tax professional before filing.
What if I already missed my estimated tax payments earlier this year?
If you missed a quarterly estimated payment, the underpayment penalty for that period has already begun accruing. Making a larger Q4 payment does not undo that. What you can do is calculate the full amount owed and pay it by January 15, 2027, which limits further accrual. When you file your 2026 return, you will likely need to complete Form 2210 to calculate the penalty amount. If your total underpayment is under $1,000, no penalty applies. Talk to a tax professional about whether annualizing your income across quarters could reduce the penalty if your STR income was unevenly distributed throughout 2026.
How do I track personal use days for my STR property?
The most reliable method is a written log that records every night the property was used personally (by you or a family member) alongside every rental night. Your Airbnb or Vrbo transaction history provides a clear record of rental days. For personal use, you need your own records: a simple spreadsheet, a dated calendar, or notes in your property management software. Keep in mind that any night rented at below market rate counts as personal use under Section 280A, even if you technically received payment. If you do not already have a tracking system in place, start one for 2027 so this is not a scramble again next December.
What records do I need to file my 2026 STR taxes?
At minimum: gross income by platform, any 1099-K forms you receive, receipts for all deductible expenses, mortgage interest statements (Form 1098 if applicable), property tax records, depreciation schedules from prior years, records of any capital improvements made in 2026, occupancy tax filings, and documentation of personal use days. If you placed a new property in service in 2026, you also need the settlement statement, any cost segregation study, and receipts for personal property such as furniture and equipment. The more complete your records now, the faster your accountant can file and the more defensible your return is in the event of an IRS inquiry.
We do our best to keep our regulatory guides accurate and up to date, but tax law changes and we are only human. Always verify current requirements with a qualified tax professional before making decisions specific to your situation. IRS publications and your accountant are the authoritative sources for your 2026 return.
Know Your Numbers Before the Deadline
Five moves. One hard deadline. The investors who take these steps in the next 54 days will file from a position of confidence in April. The ones who skip them will spend the first part of 2027 sorting out what they could have handled in December.
Knowing what your 2026 STR revenue actually looks like is the starting point for every calculation on this checklist. The StaySTRA Analyzer can give you a clear picture of your property’s annual performance and help you estimate the tax benefit of these moves before you sit down with your accountant.
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