Turo Host Taxes in Minnesota - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in Minnesota?

Yes, income earned as a Turo host is absolutely taxable, both at the federal and Minnesota state levels. The IRS considers Turo hosting a business activity, meaning you’ll need to report your earnings and expenses.

Federal Requirements (Schedule C): You will report your Turo income and expenses on Schedule C (Profit or Loss From Business) as part of your Form 1040. This form calculates your net profit (income minus expenses). Even if you only host occasionally, if your gross income exceeds $400, you are required to file Schedule SE and pay self-employment tax (see section 3).

Minnesota Specific Rules: Minnesota has a graduated income tax system, meaning the tax rate you pay 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 Minnesota. This total income is then used to calculate your Minnesota income tax liability based on the current year’s tax brackets. You’ll report this income on Minnesota Form M1.

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 in Minnesota:

• 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 Depreciation: Instead of mileage, you can deduct depreciation. This allows you to write off a portion of the vehicle's cost over several years. This can be more beneficial if your vehicle is newer and has a higher value. Consult with a tax professional to determine the best method for your situation.
• Car Wash & Detailing: Expenses related to cleaning and maintaining your vehicle for rental purposes are deductible. Keep receipts!
• Turo Fees & Software: Fees paid to Turo, as well as the cost of any software or apps used to manage your Turo business (e.g., scheduling tools, expense trackers) 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 rate is 15.3% (12.4% for Social Security and 2.9% for Medicare).

You’ll calculate this tax on Schedule SE (Self-Employment Tax). The good news is you can deduct one-half of your self-employment tax from your adjusted gross income on Form 1040, which can help lower your overall tax liability.

Closing Tip for Minnesota Residents

Navigating taxes as a Turo host can be complex. It’s highly recommended to keep meticulous records of all income and expenses throughout the year. Consider using accounting software designed for self-employed individuals. As a Minnesota resident, remember to factor in your state income tax obligations alongside your federal taxes. Don't hesitate to consult with a qualified tax professional – like myself – to ensure you're taking advantage of all available deductions and complying with all applicable tax laws.