Understand how the IRS taxes short-term rentals, from the 14-day rule to deductible expenses and 1099-K reporting. A must-read guide for short-term rental hosts.

The IRS is offering penalty relief for 2025 as employers struggle to comply with new reporting requirements for tips and overtime pay under the OBBBA. While businesses won’t face penalties this year for failing to separately report qualified tips, overtime compensation, and occupation codes, this transition period is explicitly temporary—and smart employers will use it to prepare for full compliance in 2026.