Turo Host Taxes in Rhode Island - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in Rhode Island?

Yes, income earned as a Turo host is absolutely taxable, both at the federal and Rhode Island 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 calculates your net profit (income minus expenses). The official 2024 standard mileage rate for business use is 67 cents per mile. Keep meticulous records of your mileage!

Rhode Island Specifics: Rhode Island 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 Rhode Island. Rhode Island will then apply the appropriate tax rate based on your income bracket. You’ll report this income on Rhode Island Form RI-1040. Be sure to check the current Rhode Island tax brackets for 2024, as they are subject to change.

Top Tax Write-offs for Turo Hosts

• Mileage: As mentioned, you can deduct 67 cents per mile (for 2024) for business use of your vehicle. You must choose between the standard mileage rate and actual expenses (gas, oil, repairs, etc.) – you can’t use both. Keep a detailed mileage log!
• Vehicle Depreciation: You can deduct a portion of the vehicle's cost each year through depreciation. There are different depreciation methods (e.g., standard depreciation, Section 179 deduction), and the best option depends on your specific situation. Consulting with a tax professional is recommended for this.
• Turo Fees & Software: Any fees you pay to Turo (e.g., commission fees) are deductible. Also, the cost of any software or apps you use specifically for managing your Turo business (e.g., accounting software, trip tracking apps) is deductible.
• Car Wash & Detailing: Expenses for cleaning and detailing your vehicle, directly related to preparing it for rentals, are deductible. Keep receipts!

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 combined tax is 15.3% (12.4% for Social Security and 2.9% for Medicare). You’ll calculate this tax on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on your net earnings after deducting one-half of your self-employment tax from your gross income. Don't be alarmed when you see this tax – it's a normal part of being self-employed! The $400 threshold applies – if your net earnings are less than $400, you don’t owe self-employment tax.

Closing Tip for Rhode Island Residents

Navigating self-employment taxes can be complex. As a Rhode Island resident, remember to factor in your state’s graduated income tax rates when estimating your tax liability. I strongly recommend keeping excellent records of all your income and expenses throughout the year. Consider using accounting software designed for self-employed individuals. Finally, don’t hesitate to consult with a qualified tax professional – like myself – to ensure you’re maximizing your deductions and complying with all federal and Rhode Island tax laws.