Turo Host Taxes in Arkansas - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in Arkansas

Sharing your vehicle on Turo provides a flexible income stream, but navigating the tax implications as an Arkansas resident requires careful attention. Revenue generated through Turo is considered self-employment income, subject to both federal and state taxes.

The IRS requires Turo hosts to report earnings on Schedule C (Profit or Loss From Business) with Form 1040. This income is also subject to self-employment tax, which covers both Social Security and Medicare taxes. Platforms like Turo do not withhold these taxes, meaning hosts are responsible for calculating and paying them directly to the IRS.

How Arkansas Handles Gig Worker Taxes

As a resident of Arkansas, you are required to file a state income tax return, even if your only income is from Turo. Arkansas utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Arkansas residents earning income from self-employment will primarily use Form AR1040 and Schedule IN (Income) to report their Turo earnings. It's crucial to accurately calculate your net profit from Schedule C and transfer that amount to your Arkansas return. Arkansas also allows for itemized deductions, which may further reduce your taxable income. Keep detailed records of all income and expenses related to your Turo business. The Arkansas Department of Finance and Administration provides comprehensive information and resources for taxpayers, including frequently asked questions and downloadable forms. Estimated tax payments may be required throughout the year if you anticipate owing more than $1,000 in Arkansas state income tax. Failure to make timely payments can result in penalties. Consulting with a qualified tax professional familiar with Arkansas tax law is highly recommended to ensure compliance and maximize potential deductions.

You can find more information on the Arkansas Department of Finance and Administration website: Arkansas Department of Finance and Administration

Top Tax Deductions for Arkansas Drivers

• Standard Mileage: The most popular deduction for Turo hosts. The 2025 rate is 70 cents per mile. Given Arkansas's relatively stable gas prices, the standard mileage rate is often a beneficial and simplified method for calculating vehicle expenses.
• Tolls & Parking: While Arkansas doesn't have extensive toll roads, any tolls incurred while delivering or retrieving vehicles for Turo rentals are deductible. Parking fees directly related to your Turo business are also deductible.
• Phone & Data Plan: If you use your phone for Turo-related communication (scheduling, messaging with renters, etc.), you can deduct the percentage of your monthly bill attributable to business use.
• Vehicle-Related Costs: Expenses like car wash supplies, air fresheners, phone mounts for renters, and even small amenities offered to improve the rental experience are deductible.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses like gas, oil changes, or repairs in the same year. Choose the method that yields the greater deduction.

Understanding the 15.3% Self-Employment Tax

This tax covers both Social Security and Medicare, and it's your responsibility as a self-employed individual to pay it. Turo, and other gig platforms, do not withhold these taxes from your earnings. You'll calculate this tax on Schedule SE (Self-Employment Tax) and include it with your Form 1040 when filing your federal income tax return.