Turo Host Taxes in North Carolina - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in North Carolina?

Yes, income earned as a Turo host is absolutely taxable, both at the federal and North Carolina 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. Keep meticulous records of all income and expenses throughout the year.

North Carolina Specific Rules: North Carolina has a flat income tax rate of 4.5% 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. North Carolina generally follows federal adjusted gross income (AGI) as a starting point, but it’s crucial to understand any state-specific adjustments or deductions that might apply. You will file Form D-400 to report your North Carolina income tax.

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:

• 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.). You must keep a detailed mileage log with dates, destinations, and business purpose.
• Vehicle Depreciation: Instead of taking the standard mileage rate, you can deduct depreciation on your vehicle. This allows you to write off a portion of the vehicle's cost over its useful life. This is more complex and often requires professional assistance.
• Cleaning & Maintenance: Expenses for cleaning, detailing, oil changes, tire rotations, and other vehicle maintenance are deductible. Keep all receipts!
• Turo Fees & Software: The fees you pay to Turo, as well as the cost of any software or apps used to manage your Turo business (e.g., accounting software, scheduling tools), are deductible business expenses.

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 called Self-Employment Tax and is currently 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare).

You’ll calculate this tax on Schedule SE (Self-Employment Tax). The good news is you only pay self-employment tax on 92.35% of your net earnings from Schedule C. You do get to deduct one-half of your self-employment tax from your gross income on Form 1040.

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

Closing Tip for North Carolina Residents

Navigating taxes as a Turo host can be complex. While this guide provides a good overview, it’s always best to consult with a qualified tax professional, especially in North Carolina, to ensure you’re taking advantage of all applicable deductions and complying with all state and federal regulations. Keeping excellent records throughout the year will save you time and potential headaches during tax season. Good luck, and happy hosting!