Turo Host Taxes in California - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in California

California’s vibrant tourism and car-sharing economy provide a unique opportunity for vehicle owners to generate income through platforms like Turo. However, alongside the benefits comes the responsibility of accurate tax reporting.

As a Turo host, the income earned is considered self-employment income and must be reported to the IRS. This means filing a Schedule C (Profit or Loss from Business) with Form 1040, and potentially owing self-employment tax if net earnings exceed $400. Accurate record-keeping throughout the year is crucial for maximizing deductions and minimizing tax liability.

How California Handles Gig Worker Taxes

California, as a state with a progressive income tax system, requires residents to file a state income tax return regardless of income level. As a Turo host earning income within California, you are obligated to report this income to the California Franchise Tax Board (FTB). California utilizes a graduated tax system, meaning the tax rate increases as your income increases. The primary form for self-employed individuals to report income and calculate tax liability is Form 540, California Resident Income Tax Return. This form requires you to report your federal Adjusted Gross Income (AGI) and then calculate your California taxable income, taking into account any applicable California-specific deductions and credits.

California also has a minimum franchise tax for those operating as a sole proprietor. While typically minimal, it's important to be aware of this requirement. Furthermore, California’s high cost of living, particularly regarding vehicle expenses like fuel and insurance, can significantly impact profitability. It’s essential to meticulously track all income and expenses related to your Turo hosting activity to accurately determine your state tax obligations. The FTB offers numerous resources and publications to assist self-employed individuals in understanding their tax responsibilities. You can find more information on the FTB website: https://www.ftb.ca.gov/

Top Tax Deductions for California Drivers

• Standard Mileage: The #1 deduction for many Turo hosts. The 2025 rate is 70 cents per 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: California drivers frequently encounter tolls, particularly on bridges in the Bay Area (using Fastrak). All toll and parking fees directly related to Turo trips are deductible.
• Phone & Data Plan: If you use your phone for managing bookings, communicating with renters, or navigating to pick-up/drop-off locations, you can deduct the percentage of your phone and data plan attributable to business use.
• Vehicle-Related Costs: Expenses like car wash supplies, air fresheners, phone mounts, portable chargers, 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

The 15.3% self-employment tax covers both Social Security and Medicare taxes. Unlike traditional employment where these taxes are withheld from your paycheck, as a Turo host, you are responsible for paying both the employer and employee portions of these taxes on net earnings exceeding $400. This is a significant tax obligation, so proper planning and estimated tax payments throughout the year are highly recommended.