Turo Host Taxes in Kentucky - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in Kentucky?

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

Kentucky Specific Rules: Kentucky has a flat income tax rate of 4.0% 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. Kentucky also requires you to file a state income tax return (Form 740) to report this income. Kentucky generally follows federal adjusted gross income (AGI) as a starting point, but there can be specific state adjustments, so it’s important to be aware of Kentucky Department of Revenue publications.

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 Kentucky:

• Mileage: This is often the biggest deduction! For 2024, the standard mileage rate is 67 cents per business mile driven for Turo-related activities (picking up/dropping off vehicles, inspections, etc.). Keep a detailed mileage log!
• 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.
• Turo Fees & Commissions: The fees Turo charges for using their platform are a deductible business expense.
• Cleaning & Maintenance: Costs associated with cleaning, detailing, oil changes, tire rotations, and other vehicle maintenance are deductible. Keep all receipts!
• Insurance: The portion of your insurance premium directly related to your Turo hosting activity may be deductible. (This can be complex, consult a professional).

Important Note: You generally need to choose between using the standard mileage rate or deducting actual expenses (gas, oil, repairs, etc.). You can't do both!

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 15.3% (12.4% for Social Security and 2.9% for Medicare) on your net earnings from Schedule C.

You’ll calculate this tax on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on 92.35% of your net profit. The good news is that you can deduct one-half of your self-employment tax from your gross income on Form 1040, which helps reduce your overall tax burden.

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

Closing Tip for Kentucky Residents

Navigating self-employment taxes can be complex. While this guide provides a good overview, it’s always best to consult with a qualified tax professional – especially in your first year as a Turo host – to ensure you’re taking all eligible deductions and complying with both federal and Kentucky tax laws. Keeping meticulous records of your income and expenses throughout the year will make tax time much smoother. Good luck, and happy hosting!