Turo Host Taxes in Delaware - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in Delaware

Delaware’s charming coastal towns and vibrant cities make it a popular destination, offering Turo hosts a unique opportunity to earn income by sharing their vehicles. However, alongside the benefits of car sharing comes the responsibility of understanding and fulfilling tax obligations.

As a Turo host, the income earned is generally 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 on net earnings exceeding $400. Accurate record-keeping throughout the year is crucial for maximizing deductions and ensuring compliance.

How Delaware Handles Gig Worker Taxes

Delaware, like most states, requires residents to file a state income tax return. As a Turo host earning income within or attributed to Delaware, you are subject to Delaware income tax. Delaware utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Delaware residents will need to file Form 540, the Delaware Income Tax Return for Individuals. This form is used to calculate your tax liability based on your total income, deductions, and credits. Delaware also offers various credits and deductions that may reduce your overall tax burden. It’s important to note that Delaware does not have a separate tax form specifically for self-employment income; it’s all reported through the standard Form 540. Delaware’s Division of Revenue provides detailed information and resources for taxpayers, including instructions for Form 540 and updates on tax laws. Failure to file and pay state income tax on time can result in penalties and interest. Delaware’s tax rates for 2025 are expected to remain consistent with prior years, but it’s always best to consult the official Delaware Division of Revenue website for the most up-to-date information.

You can find more information on Delaware's tax system here: Delaware Division of Revenue

Top Tax Deductions for Delaware Drivers

• Standard Mileage: The most common and often simplest deduction. The 2025 rate is 70 cents per mile for business use. Given Delaware’s relatively moderate gas prices, the standard mileage rate is likely to be a beneficial option for many Turo hosts.
• Tolls & Parking: Delaware drivers frequently encounter tolls on the Delaware Turnpike and parking fees in cities like Wilmington and Dover. These expenses are fully deductible as business expenses.
• 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 that corresponds to business use.
• Vehicle-Related Costs: Expenses like car wash supplies, air fresheners, phone mounts, and even hot bags for delivery (if applicable) are deductible as ordinary and necessary business expenses.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses (like gas, oil changes, repairs, insurance, and depreciation) in the same year. Choose the method that yields the larger 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 your net earnings exceeding $400. This is a significant tax obligation, so proper planning and estimated tax payments throughout the year are highly recommended.