Turo Host Taxes in California - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in California?

Yes, income earned as a Turo host is absolutely taxable, both at the federal and California state levels. The IRS considers Turo hosting a business activity, meaning you’re considered self-employed. For federal taxes, you’ll report your Turo income and expenses on Schedule C (Profit or Loss From Business), which is then filed with your Form 1040. This schedule calculates your net profit (income minus expenses).

California follows suit, requiring you to report this Schedule C income on your California Form 540. However, California’s graduated income tax system means the rate at which your Turo profits are taxed will depend on your total income for the year. California has some of the highest state income tax rates in the US, so accurate record-keeping and maximizing deductions are particularly important. Higher net profits from Turo could push you into a higher tax bracket, increasing your overall tax liability. You'll also need to consider potential California self-employment tax implications (discussed briefly below).

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 mileage log documenting the dates, destinations, and business purpose of each trip (e.g., picking up/dropping off a renter). You cannot include commuting miles.
• Vehicle Expenses (Alternative to Mileage): Instead of the standard mileage rate, you can deduct the actual expenses of operating your vehicle. This includes things like gas, oil changes, repairs, maintenance, insurance, registration fees, and depreciation. Choosing between mileage and actual expenses depends on which yields a larger deduction – careful calculation is key.
• Turo Fees & Software: Any fees you pay directly to Turo (e.g., commission fees) are deductible. Also, if you use any software specifically for managing your Turo business (e.g., accounting software, trip tracking apps), those subscription costs are deductible.
• Cleaning & Maintenance: Expenses related to cleaning, detailing, and maintaining your vehicle in rentable condition are deductible. Keep receipts for cleaning supplies, detailing services, and any minor repairs you make.

The 15.3% Self-Employment Tax Surprise

Because you’re self-employed, 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 up to the annual wage base, and 2.9% for Medicare). You’ll calculate this on Schedule SE (Self-Employment Tax). The good news is you get to deduct one-half of your self-employment tax from your adjusted gross income on Form 1040, which can lower your overall tax bill. However, it's a significant tax liability that many new Turo hosts aren't prepared for, so budgeting for it is crucial. Remember, self-employment tax applies to net earnings over $400.

Closing Tip for California Residents

As a California Turo host, diligent record-keeping is your best friend. The state’s high income tax rates mean maximizing your deductions is essential. Consider using accounting software designed for self-employed individuals to track income, expenses, and mileage. Don't hesitate to consult with a qualified tax professional (like myself!) to ensure you're taking advantage of all available deductions and complying with all applicable tax laws. Proactive tax planning can save you significant money and stress during tax season.