Turo Host Taxes in Colorado - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in Colorado

Sharing your vehicle through Turo offers a flexible income stream, especially with Colorado’s stunning scenery attracting tourists year-round. However, that income is subject to both federal and state taxes, requiring careful record-keeping and understanding of applicable regulations.

As a Turo host, the IRS considers income earned from renting your vehicle as self-employment income. This means it must be reported on Schedule C (Profit or Loss From Business) with your Form 1040. Crucially, this income is also subject to self-employment tax, covering both Social Security and Medicare taxes, which are not automatically withheld like they would be from a traditional employer.

How Colorado Handles Gig Worker Taxes

Colorado, known for its outdoor lifestyle and growing gig economy, requires residents to file a state income tax return regardless of income level. As a self-employed individual earning income through Turo, you are responsible for paying Colorado state income tax on your net earnings. Colorado operates under a flat income tax rate, currently at 4.40% for the 2025 tax year. This means all taxable income is taxed at the same rate. You will report your Turo income and expenses on the Colorado Form DR 0104, Individual Income Tax Return. It’s important to note that Colorado also requires estimated tax payments if you expect to owe $1,000 or more in state income tax. These payments are typically made quarterly. Failure to make timely estimated payments can result in penalties. Colorado also offers various credits and deductions that may reduce your tax liability, so exploring these options is recommended. The Colorado Department of Revenue provides comprehensive information and resources for self-employed individuals; you can find more details at Colorado Department of Revenue.

Top Tax Deductions for Colorado Drivers

• Standard Mileage: The #1 deduction for many Turo hosts. The 2025 rate is 70 cents per mile. Given Colorado’s diverse terrain and potential for longer trips to destinations like ski resorts or national parks, this method can yield significant savings.
• Tolls & Parking: While Colorado doesn’t have extensive toll roads, expenses incurred for parking related to vehicle maintenance, cleaning, or delivery to renters are deductible.
• Phone & Data Plan: If you use your phone for Turo-related activities (communication with renters, managing listings, etc.), you can deduct the percentage of your phone bill attributable to business use.
• Vehicle-Related Costs: Expenses like car wash supplies, detailing products, phone mounts for renters, or even small amenities provided to enhance the rental experience 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 is comprised of two parts: 12.4% for Social Security and 2.9% for Medicare. Unlike traditional employment, Turo and other gig platforms do not withhold these taxes from your earnings. Therefore, it’s your responsibility to calculate and pay this tax, typically through estimated tax payments made quarterly to the IRS.