Turo Host Taxes in Washington - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Turo Host income taxable in Washington?

Yes, income earned as a Turo host is taxable, but the specifics differ between federal and Washington state. Federally, the IRS considers Turo hosting a business activity. You’ll report your Turo income and expenses on Schedule C (Profit or Loss From Business), which is filed with your Form 1040. This means you’ll calculate your net profit (income minus expenses) and that profit is added to your overall income for the year.

Washington State is unique – it does not have a state income tax. However, this doesn’t mean your Turo income is entirely free from state taxation. Washington does have a Capital Gains tax, currently applicable to profits exceeding $100,000 from the sale or exchange of assets. While renting your vehicle is generally not considered a sale or exchange triggering capital gains tax, it’s crucial to understand this potential implication if you were to sell the vehicle at a profit during the year. Consult with a tax professional if you sell a vehicle used for Turo hosting.

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 key deductions:

• Mileage: The IRS allows you to deduct the business use of your vehicle. For 2024, the standard mileage rate is 67 cents per mile (verify the final official rate from the IRS). You must keep accurate records of your mileage – both business miles (when the car is rented) and total miles driven. You can choose between the standard mileage rate or actual expenses (gas, oil, repairs, etc.), but not both.
• Vehicle Depreciation: You can deduct a portion of the vehicle's cost over its useful life. There are different depreciation methods available (e.g., standard depreciation, Section 179 deduction, bonus depreciation). This can be a substantial deduction, especially in the early years of renting.
• Cleaning & Maintenance: Expenses related to cleaning, detailing, oil changes, tire rotations, and other maintenance directly related to preparing the vehicle for rental are deductible.
• 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., scheduling tools, expense trackers) are deductible.

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 is known as Self-Employment Tax. You’ll report 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 that you can deduct one-half of your self-employment tax from your adjusted gross income.

Closing Tip for Washington Residents

While Washington State doesn’t have an income tax, meticulous record-keeping is still vital for maximizing your federal deductions and understanding potential capital gains implications if you sell your vehicle. Consider using accounting software designed for self-employed individuals to track income, expenses, and mileage. Don't hesitate to consult with a qualified tax professional – like myself – to ensure you're taking advantage of all available tax benefits and remaining compliant with IRS regulations.