Turo Host Taxes in Hawaii - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in Hawaii?

Yes, income earned as a Turo host is absolutely taxable, both federally and in Hawaii. 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 calculates your net profit (income minus expenses). Even if you don’t expect a profit, you still need to file Schedule C to report all income and deductible expenses.

Hawaii Specific Rules: Hawaii has a graduated income tax system, meaning the tax rate increases as your income increases. Your Turo net profit (from Schedule C) will be added to your other income (wages, investments, etc.) to determine your total taxable income for Hawaii. Hawaii then applies its graduated tax rates to that total. You’ll file Form N-11, Hawaii Individual Income Tax Return, to report your income and calculate your Hawaii income tax liability. Hawaii also has tax brackets, so the more you earn from Turo (and other sources), the higher your tax rate will be. Be sure to consult the current Hawaii tax brackets for the 2024 tax year when filing in 2025.

Top Tax Write-offs for Turo Hosts

Maximizing your deductions is key to minimizing your tax bill. Here are some common deductions for Turo hosts:

• Mileage: You can deduct the business portion of your vehicle’s mileage. For 2024, the standard mileage rate is approximately 67 cents per mile (verify the official IRS rate at IRS.gov). Keep a detailed mileage log!
• Vehicle Expenses (Instead of Mileage): Instead of using the standard mileage rate, you can deduct actual vehicle expenses like gas, oil changes, repairs, maintenance, insurance, registration fees, and depreciation. This requires more detailed record-keeping. Generally, if your actual expenses are higher than the mileage rate deduction, this is the better option.
• Cleaning & Maintenance: Costs associated with cleaning your vehicle between rentals, detailing, and regular maintenance (beyond standard repairs) are deductible.
• Turo Fees & Software: The fees you pay to Turo, as well as any software or subscription services you use to manage your Turo business (e.g., scheduling apps, expense trackers) are deductible.

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 Hawaii Residents

Navigating taxes as a Turo host can be complex, especially with Hawaii’s graduated income tax system. I strongly recommend keeping meticulous records of all your 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 Hawaii tax laws. Aloha and happy hosting!