Turo Host Taxes in South Dakota - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in South Dakota?

Yes, your income from Turo is taxable, but the specifics are simpler in South Dakota than in many other states. The IRS considers income earned through Turo as self-employment income. This means you'll report your earnings and expenses on Schedule C (Profit or Loss From Business) when you file your federal income tax return (Form 1040). You’ll calculate your net profit (income minus expenses) on Schedule C, and that net profit is then added to your adjusted gross income on Form 1040.

South Dakota Specifics: South Dakota is one of the few states with no state income tax. This means you will not file a state income tax return, and you won’t owe any income tax to the state of South Dakota on your Turo earnings. However, this does not exempt you from federal income tax obligations.

Top Tax Write-offs for Turo Hosts

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

• 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 (Instead of Mileage): Instead of using the standard mileage rate, you can deduct actual vehicle expenses like gas, oil changes, repairs, maintenance, insurance, registration fees, and depreciation. Choosing between mileage and actual expenses depends on which results in a larger deduction – keep good records to compare.
• Cleaning & Maintenance Supplies: The cost of supplies used to clean and maintain your vehicle for Turo rentals (e.g., car wash soap, interior cleaners, air fresheners) are deductible.
• Turo Fees & Software: Fees paid to Turo, as well as the cost of any software or apps you use to manage your Turo business (e.g., scheduling tools, expense trackers) are deductible.

The 15.3% Self-Employment Tax Surprise

Because you're self-employed, you're responsible for 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). You only pay self-employment tax on profits over $400. The good news is you can deduct one-half of your self-employment tax from your gross income on Form 1040, which reduces your overall tax liability.

Closing Tip for South Dakota Residents

While South Dakota’s lack of state income tax simplifies things, don’t underestimate your federal tax obligations as a Turo host. Meticulous record-keeping is crucial – track all income and expenses throughout the year. Consider using accounting software or consulting with a tax professional (like myself!) to ensure you’re maximizing your deductions and complying with all IRS regulations. Filing accurately and on time will help you avoid penalties and keep your Turo business running smoothly.