The Money That Isn't Income: How Maine STR Hosts Should Handle Cleaning Fees, Damage Deposits, and Guest Refunds
It's almost mid-July. If you host a vacation rental in Maine, your bank account has settled into the rhythm of peak season — payouts landing every few days as guests check in and check out.
Here's what catches a lot of hosts off guard: not every dollar moving through that account is income. And some of the money that feels like pass-through actually isn't.
Getting these transactions right isn't an accounting technicality. It determines whether your Profit and Loss report tells you the truth about your rental — and whether your tax return is accurate next spring. Let's walk through the transactions that trip up STR hosts most often.
Cleaning fees feel like pass-through money — but they're income
Your guest pays a $150 cleaning fee. You pay your cleaner $150. It feels like the money just passed through your hands, so many hosts don't record it at all.
For bookkeeping and tax purposes, that cleaning fee is income — and the payment to your cleaner is a separate expense. The two need to be recorded independently, not netted against each other.
Why does this matter? Three reasons. First, it's how the IRS expects it to be reported. Second, it keeps your revenue picture accurate — if you charge $150 and your cleaner costs $120, you're earning margin on cleaning, and you should be able to see that. Third, if you ever raise your cleaning fee or change cleaners, you'll want the data to know what actually changed.
In QuickBooks, set up a Cleaning Fee Income sub-account under your rental income, and record cleaner payments to a Cleaning Expense account. Gross on both sides, always.
Damage deposits are a liability, not income
If you take refundable damage deposits — most common with direct bookings — that money is not yours when it arrives. You're holding it on the guest's behalf, and in bookkeeping terms that makes it a liability.
Record incoming deposits to a liability account (something like "Guest Deposits Held"), not to income. When you refund the deposit after checkout, the refund clears the liability — it never touches your P&L at all.
The exception: if you keep some or all of a deposit to cover damage, the portion you keep becomes income at that point, and the repair you pay for is recorded as an expense. Keep photos and receipts — documentation protects you if the guest disputes the charge.
Guest refunds reduce your income — they aren't an expense
A guest cancels, or something goes wrong mid-stay and you issue a partial refund. Where does that go in your books?
The instinct is to record it as an expense. The correct treatment is a reduction of income — often set up as a "Refunds" contra-income account that shows as a negative under your revenue.
The distinction matters because recording refunds as expenses overstates both your revenue and your costs. Your net profit comes out the same, but your P&L stops telling you the truth about how much you actually earned and what it actually cost to operate. When you're evaluating your season in the fall, that clarity matters.
Damage reimbursements from the platform aren't booking revenue
If Airbnb's AirCover or a resolution center claim reimburses you for guest damage, that money shouldn't be lumped in with your booking payouts. Record it as other income (or as an offset to the specific repair expense) so your rental revenue reflects actual stays — not one-time reimbursements.
Keep the claim documentation with the transaction. If the repair spans a payout cycle, matching the reimbursement to the expense keeps the whole event easy to explain at tax time.
The bottom line
In July, your job is hosting — turnovers, guest messages, keeping the season running. But every one of these transactions is happening right now, whether or not it's being recorded correctly.
A chart of accounts that separates cleaning fee income, deposit liabilities, refunds, and reimbursements takes about twenty minutes to set up — and it means the P&L you run in October actually means something.
McAfee's Bookkeeping works with Maine vacation rental hosts to keep books accurate through the busy season — including the transactions that don't fit neatly into "income" and "expense." If your rental's books could use a second look, a free consultation is a good place to start. Schedule at mcafeesbookkeeping.com.
