Turo Host Taxes in New Jersey - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in New Jersey?

Yes, income earned as a Turo host is absolutely taxable, both at the federal and New Jersey 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) of Form 1040. This form calculates your net profit (income minus expenses). Even if you only rent your car occasionally, if you are attempting to make a profit, it's considered a business. Keep meticulous records of all income and expenses.

New Jersey Specific Rules: New Jersey has a graduated income tax system. This means 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 New Jersey. New Jersey then applies its graduated tax brackets to calculate your state income tax liability. You’ll report this income on Form NJ-1040. New Jersey also allows for deductions similar to the federal level, which can help reduce your taxable income.

Top Tax Write-offs for Turo Hosts

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

• Mileage: You can deduct the business use of your vehicle. For 2024, the standard mileage rate is approximately 67 cents per mile (always verify the official IRS rate at IRS.gov). You must keep a detailed mileage log documenting business miles driven (e.g., trips to/from the rental location, for maintenance related to rentals).
• Vehicle Expenses (Instead of Mileage): Instead of using the standard mileage rate, you can deduct actual vehicle expenses. This includes costs like gas, oil changes, repairs, maintenance, insurance, registration fees, and depreciation. This method requires more detailed record-keeping.
• Cleaning & Maintenance: Expenses directly related to preparing your vehicle for renters – detailing, car washes, minor repairs caused by renters – are deductible.
• Turo Fees & Software: The fees you pay to Turo, as well as any software or subscription costs used to manage your Turo business (e.g., accounting software, trip tracking apps), 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 are responsible for both the employer and employee portions. 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 get to deduct one-half of your self-employment tax from your gross income on Form 1040, which helps to offset the impact. The $400 threshold applies – you only pay self-employment tax on net earnings over $400.

Closing Tip for New Jersey Residents

Navigating taxes as a Turo host can be complex. I strongly recommend keeping detailed records of all income and expenses throughout the year. Consider using accounting software designed for self-employed individuals. And, if you're unsure about any aspect of your tax obligations, consulting with a qualified tax professional (like myself!) specializing in self-employment income in New Jersey is a wise investment. We can help you maximize your deductions and ensure you’re compliant with both federal and state tax laws.