Turo Host Taxes in Iowa - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in Iowa?

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

Iowa Specific Rules: Iowa has a graduated income tax system. This means the tax rate you pay depends on your total taxable income. Your Turo net profit (from Schedule C) will be added to your other income (wages, investments, etc.) to determine your overall taxable income and the applicable tax bracket. Iowa Form 1040 is used to calculate your Iowa income tax liability. You'll need to factor in any Iowa deductions or credits you may be eligible for in addition to your federal deductions.

Top Tax Write-offs for Turo Hosts

As a Turo host, you can significantly reduce your tax liability by claiming eligible business expenses. Here are some key deductions:

• Mileage: This is often the biggest deduction! For 2024, the standard mileage rate is 67 cents per business mile driven (this is subject to official IRS confirmation, but is the current estimate). Keep a detailed mileage log documenting the date, purpose, and miles driven for each trip. You cannot use mileage if you claim actual expenses (see below).
• Actual Car Expenses: Instead of mileage, you can deduct the actual costs of operating your vehicle. This includes expenses like gas, oil changes, repairs, maintenance, insurance, registration fees, and depreciation. You’ll need to track all these expenses carefully.
• Turo Fees & Software: The fees you pay to Turo (commission) are deductible. Also, any software or subscription services you use specifically for managing your Turo business (e.g., trip tracking apps, accounting software) are deductible.
• Cleaning & Maintenance Supplies: The cost of cleaning supplies, detailing services, and minor repairs you perform to keep your vehicle presentable for renters are deductible.

The 15.3% Self-Employment Tax Surprise

Many Turo hosts are surprised to learn about self-employment tax. When you work for an employer, they pay half of your Social Security and Medicare taxes. As a self-employed individual, you’re responsible for both the employer and employee portions. This combined tax is 15.3% (12.4% for Social Security and 2.9% for Medicare).

You’ll calculate this tax on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on your net profit (after deducting business expenses). There's a good thing: you can deduct one-half of your self-employment tax from your gross income on Form 1040, which reduces your overall income tax liability.

Important Note: Self-employment tax applies to earnings over $400.

Closing Tip for Iowa Residents

Navigating self-employment taxes can be complex. As an Iowa resident, remember to keep meticulous records of all your Turo income and expenses. Consider using accounting software or working with a qualified tax professional (like myself!) to ensure you’re taking all the deductions you’re entitled to and complying with both federal and Iowa tax laws. Proactive tax planning can save you money and headaches in the long run. Good luck with your Turo hosting business!