Turo Host Taxes in Arkansas - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in Arkansas?

Yes, income earned as a Turo host is absolutely taxable, both at the federal and Arkansas state levels. The IRS considers Turo hosting a business activity, meaning you’ll need to report your earnings and expenses.

Federal Requirements: You’ll report your Turo income and expenses on Schedule C (Profit or Loss From Business), which is filed with your Form 1040. This schedule allows you to deduct all ordinary and necessary business expenses, ultimately determining your net profit or loss.

Arkansas Specific Rules: Arkansas has a graduated income tax system. This means the tax rate you pay depends on your total taxable income. Your net profit from Schedule C will be added to your other income (like wages from a W-2 job) to determine your Arkansas taxable income. Arkansas also requires you to file an Arkansas individual income tax return (Form AR1040) to report this income. The rates for 2024 (filing in 2025) will vary, so consult the Arkansas Department of Finance and Administration website for the most up-to-date brackets: https://www.arkansas.gov/departments/finance-administration/taxation. You'll likely need to make estimated tax payments throughout the year if you expect to owe $1,000 or more in Arkansas income tax.

Top Tax Write-offs for Turo Hosts

• Mileage: This is often the biggest deduction! For 2024, the standard mileage rate is approximately 67 cents per mile for business use. Keep a detailed log of all miles driven for Turo-related activities (picking up/dropping off vehicles, maintenance, etc.). You cannot deduct commuting miles.
• Vehicle Depreciation: Instead of mileage, you can choose to deduct depreciation. This allows you to write off a portion of the vehicle's cost over several years. This is more complex than mileage, so consider consulting with a tax professional.
• Cleaning & Maintenance: Expenses for cleaning, oil changes, tire rotations, repairs, and other vehicle maintenance are deductible. Keep all receipts!
• Turo Fees & Software: The fees Turo charges you, as well as the cost of any software or apps you use to manage your Turo business (e.g., accounting software, trip tracking apps) are deductible.

The 15.3% Self-Employment Tax Surprise

Because you're considered self-employed as a Turo host, you're responsible for paying both the employer and employee portions of Social Security and Medicare taxes. This combined tax is called Self-Employment Tax and is currently 15.3% (12.4% for Social Security and 2.9% for Medicare) on earnings over $400.

You’ll calculate this on Schedule SE (Self-Employment Tax) and file it with your Form 1040. The good news is that you can deduct one-half of your self-employment tax from your adjusted gross income, which can lower your overall tax liability.

Closing Tip for Arkansas Residents

Navigating self-employment taxes can be tricky. As an Arkansas resident, remember to factor in your state income tax obligations and consider making estimated tax payments to avoid penalties. Keeping meticulous records of your income and expenses throughout the year will save you time and potential headaches during tax season. Don't hesitate to consult with a qualified tax professional – like myself – to ensure you're maximizing your deductions and complying with all applicable tax laws.