The average recreational boat spends roughly 95% of its life doing nothing. It sits at the dock, accruing slip fees, insurance premiums, and winterization bills while its owner works, travels, or simply doesn't feel like going out that weekend. Peer-to-peer marketplaces like Boatsetter and GetMyBoat exist to close that gap — letting an owner list a boat for a few hours or a weekend and collect rent from someone who wants the experience without the maintenance headache.
It's a genuinely good side income for a lot of owners. It's also a bookkeeping trap for anyone who treats it like a simple "money shows up in my bank account" hobby. Between platform commissions, security deposits, captain fees, and a tax-form fork that can turn your rental income into self-employment income overnight, boat rental has more moving financial parts than most side hustles.
How the platforms actually pay you
Boatsetter and GetMyBoat both operate the same basic way: you list your boat, set an hourly or daily rate, a renter books it, and the platform collects the full payment up front. What lands in your bank account is never the number you should be recording as income.
Boatsetter charges owners a commission that depends on your insurance arrangement. Owners who use Boatsetter's own commercial policy (underwritten through a marine insurer) pay a commission in the 20–35% range; owners who already carry their own commercial or charter insurance and opt out of Boatsetter's coverage pay closer to 10%. On top of that, any extra payments processed through the platform — add-ons, damage charges, tips — carry a separate payment-processing fee.
GetMyBoat takes a flat service fee instead of an insurance-linked one: 11.5% for domestic U.S. bookings, 14.5% for international ones. Direct bookings where the platform is used only for payment processing carry a much smaller fee (around 1.5% domestic), and if you offer a captain through the platform, an additional 5% is deducted from the captain's payout specifically.
Both platforms also let owners charge separately for a captain. If you don't hold a captain's license or don't want to run the boat yourself, you can list it "captained," and the captain fee — often $50–$100 an hour depending on vessel size — flows through the same booking but is a distinct line item, not part of your charter revenue.
Record the gross, not the deposit
Here's the mistake that causes the most year-end scrambling: recording only the amount that hits your bank account as revenue. If a renter pays $500 for a half-day charter and the platform deposits $385 after its commission, the temptation is to book $385 as income and move on. Don't.
Both platforms report gross transaction volume to the IRS on Form 1099-K once you cross the reporting threshold, and that threshold has been dropping — a single tax year can now trigger a 1099-K well below the old $20,000/200-transaction rule. If the number on your 1099-K doesn't match what you reported as income, you're inviting an IRS mismatch notice, even though you never actually touched most of that money.
The correct pattern — the same one that applies to any marketplace seller, freelance platform worker, or commissioned agent — is to book two separate entries per transaction: the full charter price as gross revenue, and the platform's commission as a business expense. Net payout is just gross revenue minus expenses; it should never be the number you type into your books directly. This also gives you a clean, permanent record of exactly how much you're paying each platform in commission over a season — a number most owners have never actually calculated.
The fork that changes your tax bill: Schedule C or Schedule E
This is the part that catches boat owners off guard, and it hinges on one question: are you renting a boat, or are you running a charter business?
The IRS draws the line at "substantial services." If you list your boat bareboat — the renter takes it out themselves, you hand over the keys and maybe a fuel tank — you're generally providing a passive rental of property. That income typically belongs on Schedule E, isn't subject to self-employment tax, and is taxed more like any other rental activity.
The moment you add a captain, though, you've moved into providing a personal service alongside the property. Charter income where you (or a captain you hire) run the boat, navigate to the fishing spots, handle safety, and deliver an experience rather than just a vessel looks a lot more like operating a small charter business. That income is generally reported on Schedule C, and — this is the expensive part — it's subject to self-employment tax on top of ordinary income tax, roughly 15.3% before any deductions.
Plenty of owners run both models on the same boat: bareboat rentals through the app most weekends, occasional captained sunset cruises for a premium. If that's you, you need to track charter revenue separately by booking type from day one, not reconstruct it from memory in April. Mixing the two into one undifferentiated "boat income" line makes it nearly impossible to file correctly, and a preparer who has to guess will usually default to the more conservative (and more expensive) Schedule C treatment for everything.
Security deposits aren't income — until they are
Boatsetter requires a minimum $500 security deposit per rental, and the platform's own commercial policy carries a deductible as high as $7,500 that gets charged against the renter's deposit if there's damage. GetMyBoat runs a similar deposit-and-claims process.
From a bookkeeping standpoint, a security deposit is a liability, not revenue — you're holding (or the platform is holding on your behalf) money that belongs to the renter unless a claim is filed. Record it as such. It only converts to income (or reduces a repair expense) when a damage claim actually resolves in your favor. Booking deposits as income the moment they're collected overstates your revenue for the year and creates a mess if you have to refund one.
The flip side matters too: if your boat is damaged beyond what the renter's deposit and the platform's insurance cover, your out-of-pocket repair cost is a deductible expense against your rental income — but only if you've been tracking maintenance and repair costs separately from routine upkeep you'd have paid for anyway as an owner.
What you can actually deduct
Whichever schedule you land on, the deductible expense list for boat rental is similar to any equipment-rental activity, prorated by the share of the boat's use that's actually business use:
- Platform commissions and payment-processing fees — the exact number this article started with
- Dockage and slip fees, to the extent allocable to rental use
- Insurance premiums, including any commercial/charter rider required by the platform
- Fuel, cleaning, and detailing between rentals
- Captain wages paid to yourself is not deductible, but wages paid to a third-party captain are
- Maintenance and repairs, including winterization and haul-outs allocated by rental-use percentage
- Depreciation on the vessel's business-use basis, potentially accelerated under Section 179 or bonus depreciation in the year the boat is placed in rental service, subject to the usual limits for mixed-use property
That last point comes with a catch worth knowing up front: if you also use the boat personally more than a minor amount, the IRS applies vacation-home-style personal-use limits (modeled on the same rules that apply to a second home you also rent out). Personal use beyond the greater of 14 days or 10% of the days it's actually rented can cap your deductions and change how losses are treated. Track personal-use days on the calendar the same way you track rental bookings — most owners only think to log the money side.
Don't forget state sales and use tax
Boat rental revenue is subject to sales, use, or rental tax in many states, and the rate and rules vary by where the boat is docked and where it's used — not just where you live. Some platforms collect and remit this automatically in certain states; others leave it entirely on the owner. Confirm which category your state and platform combination falls into before you assume it's handled, because an unpaid rental tax liability doesn't go away just because you didn't know about it.
Building a simple system
None of this requires complicated software — it requires one row per booking with a consistent set of columns: booking date, gross charter price, platform commission, payment-processing fee, captain fee (if any), security deposit collected, deposit resolution, net payout received, and rental type (bareboat or captained). Reconcile that log against your 1099-K once a year, and against your bank deposits monthly so nothing slips through.
Keep Your Charter Books as Clear as Open Water
Whether you're running weekend bareboat rentals or building out a small captained-charter side business, the difference between a clean tax season and a stressful one comes down to whether your records separate gross revenue from platform fees, and rental type from rental type, as the money comes in — not months later. Beancount.io offers plain-text accounting that gives you complete transparency and control over your financial data — no black boxes, no vendor lock-in. Get started for free and see why boat owners, freelancers, and small business owners are switching to plain-text accounting.