Turo Host Taxes in San Diego, California - 2026

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in San Diego, California

With San Diego’s beautiful weather and tourist attractions, renting out a vehicle through Turo can be a lucrative venture, but it also comes with tax responsibilities. As a Turo host in San Diego, understanding these obligations is crucial for staying compliant with both federal and California state tax laws.

The IRS requires all Turo hosts to report income earned on Schedule C (Profit or Loss From Business) as self-employment income. This means income received through the Turo platform is not considered wages, and no taxes are automatically withheld. Consequently, hosts are responsible for paying both income tax and self-employment tax (Social Security and Medicare) on net earnings exceeding $400.

How California Handles Gig Worker Taxes

As a resident of California, a state income tax return is required even if no federal tax is owed. California has a graduated income tax system, meaning the tax rate increases as your income rises. Turo income is considered self-employment income for California purposes and is subject to state income tax. The primary form for reporting self-employment income is California Form 540, along with Schedule CA(540), California Adjustments – Credits, and Schedule SE (540), Self-Employment Income. California also requires you to pay estimated taxes quarterly if you expect to owe $1,000 or more in taxes for the year. This is particularly important for Turo hosts, as income can fluctuate based on seasonal demand in San Diego – especially during peak tourist seasons and events like Comic-Con. Parking costs in popular areas of San Diego, like the Gaslamp Quarter or near beaches, can be significant and potentially deductible (see below). Furthermore, be aware of any potential city-specific business licenses or permits required for short-term rentals, though these typically don't directly impact state income tax, compliance is essential. The California Franchise Tax Board (FTB) provides comprehensive resources for self-employed individuals; you can find more information at https://www.ftb.ca.gov/.

Top Tax Deductions for San Diego, California Drivers

• Standard Mileage: The #1 deduction. The 2025 rate is 70 cents/mile. Given California’s consistently high gas prices, carefully consider whether the standard mileage rate or the actual expense method will yield a greater deduction.
• Tolls & Parking: San Diego utilizes the FasTrak system for toll roads. Keep detailed records of all toll expenses and parking fees incurred while your vehicle is being used for Turo rentals.
• Phone & Data Plan: You can deduct the percentage of your phone and data plan attributable to business use. If you use your phone for Turo-related communication, scheduling, and managing listings, a portion of the bill is deductible.
• Vehicle-Related Costs: Expenses like car wash supplies, air fresheners, phone mounts, and even hot bags for food delivery (if permitted by Turo’s terms) are deductible.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses like gas or repairs in the same year. Choose the method that results in the largest deduction.

Understanding the 15.3% Self-Employment Tax

Self-employment tax covers both Social Security and Medicare taxes. Unlike traditional employment, Turo and other gig platforms do not withhold these taxes from your earnings. Therefore, you are responsible for calculating and paying this 15.3% tax on net earnings exceeding $400. This is paid alongside your income tax when you file your annual tax return.