Turo Host Taxes in Michigan - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in Michigan?

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

Michigan Specific Rules: Michigan has a flat income tax rate of 4.05% 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. Michigan also requires you to file a state income tax return (Form MI-1040) to report this income.

Top Tax Write-offs for Turo Hosts

Maximizing your deductions is key to minimizing your tax liability. Here are some common write-offs for Michigan 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 at IRS.gov). 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.
• Cleaning & Detailing: Expenses for cleaning and detailing your vehicle to prepare it for renters are deductible.
• Turo Fees & Software: The fees you pay to Turo, as well as any subscription costs for software used to manage your listings (e.g., pricing tools, scheduling apps) are deductible business expenses.

The 15.3% Self-Employment Tax Surprise

Because you’re considered self-employed 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 on Form 1040.

Closing Tip for Michigan Residents

Don’t wait until the last minute! Carefully track all your income and expenses throughout the year. Consider using accounting software or a spreadsheet to stay organized. If you find the tax rules overwhelming, consulting with a qualified tax professional (like myself!) can ensure you’re taking all the deductions you’re entitled to and complying with both federal and Michigan tax laws. Good luck, and happy hosting!