Turo Host Taxes in Illinois - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in Illinois?

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

Illinois Specific Rules: Illinois has a flat income tax rate of 4.95% 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. Illinois also requires you to report your federal Schedule C income on Illinois Form IL-1040.

Top Tax Write-offs for Turo Hosts

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

• Mileage: You can deduct the business portion of your vehicle’s mileage. For 2024, the standard mileage rate is 67 cents per mile (verify the final official rate from the IRS – IRS Standard Mileage Rates). Keep a detailed mileage log!
• Vehicle Expenses (Actual Expense Method): Instead of mileage, you can deduct actual expenses like gas, oil changes, repairs, maintenance, tires, and vehicle registration fees. You cannot deduct both mileage and actual expenses. Choose the method that yields the larger deduction.
• Turo Fees & Commissions: The fees Turo charges for listing and processing payments are deductible business expenses.
• Cleaning & Detailing: Costs associated with cleaning and detailing your vehicle to prepare it for renters are deductible.
• Insurance: The portion of your car insurance premium directly related to the period your car was available for rent can be deducted. (This can be complex, consult a professional).

The 15.3% Self-Employment Tax Surprise

As a self-employed individual (which you are as a Turo host), you're responsible for paying both the employer and employee portions of Social Security and Medicare taxes. This is known as Self-Employment Tax.

You’ll calculate this on Schedule SE (Self-Employment Tax). The combined rate is 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). However, you only pay self-employment tax on profits exceeding $400. The good news is you can deduct one-half of your self-employment tax from your adjusted gross income.

Closing Tip for Illinois Residents

Running a successful Turo business requires diligent record-keeping. Maintain detailed records of all income and expenses, including mileage logs, receipts, and Turo statements. Consider using accounting software designed for self-employed individuals. Tax laws can be complex, and this information is for general guidance only. For personalized advice tailored to your specific situation, I highly recommend consulting with a qualified tax professional in Illinois.