Turo Host Taxes in Colorado - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in Colorado?

Yes, income earned as a Turo host is absolutely taxable, both at the federal and Colorado 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.

Colorado Specific Rules: Colorado has a flat income tax rate of 4.40% for the 2024 tax year (filing in 2025). Your net profit from Schedule C will be added to your other income and taxed at this flat rate. Colorado also requires you to file a state income tax return (Form DR 0104) to report this income. Because Colorado has a flat tax, there are no income brackets to worry about – your entire net profit is taxed at the same rate.

Top Tax Write-offs for Turo Hosts

Maximizing your deductions is key to minimizing your tax liability. Here are some common write-offs for Turo hosts in Colorado:

• Mileage: This is often the biggest deduction! For 2024, the standard mileage rate is 67 cents per mile for business use (verify the final official IRS rate when filing). Keep a detailed log of all miles driven for Turo-related activities (pickups, drop-offs, cleaning, maintenance).
• Vehicle Depreciation: You can deduct a portion of your vehicle's cost each year through depreciation. There are different methods (e.g., standard mileage vs. actual expenses – see below), and the best method depends on your specific situation.
• Cleaning & Maintenance: Expenses for cleaning supplies, car washes, oil changes, tire rotations, and other maintenance are deductible. Keep all receipts!
• Turo Fees & Software: The fees you pay to Turo, as well as the cost of any software or apps used to manage your listings (e.g., pricing tools, scheduling apps) are deductible business expenses.

Important Note: You generally need to choose between using the standard mileage rate or deducting actual expenses (gas, oil, repairs, insurance, etc.). You can't do both. The standard mileage rate is simpler, but actual expenses might yield a larger deduction if your car is expensive to operate.

The 15.3% Self-Employment Tax Surprise

As a Turo host, you're considered self-employed. This means 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 tax on Schedule SE (Self-Employment Tax). The good news is you only pay self-employment tax on your net profit (after deducting business expenses). Also, you can deduct one-half of your self-employment tax from your gross income on Form 1040.

Remember, self-employment tax applies to earnings over $400.

Closing Tip for Colorado Residents

Tax laws can be complex, and this guide provides general information. I strongly recommend keeping meticulous records of all your Turo income and expenses throughout the year. Consider using accounting software or working with a qualified tax professional (like myself!) to ensure you’re taking all eligible deductions and complying with both federal and Colorado tax regulations. Proper planning can save you significant money and headaches when tax season arrives. Good luck with your Turo hosting business!