Turo Host Taxes in Hawaii - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in Hawaii

Sharing the aloha spirit – and your vehicle – through Turo can be a rewarding way to earn income in Hawaii, but it also comes with tax responsibilities. As a Turo host, understanding these obligations is crucial for staying compliant with both federal and state regulations.

The IRS requires all Turo hosts to report their earnings as self-employment income on Schedule C (Profit or Loss From Business) when filing Form 1040. This means income earned through Turo is subject to both income tax and self-employment tax, which covers Social Security and Medicare taxes. Platforms like Turo do not withhold these taxes, making proactive tax planning essential.

How Hawaii Handles Gig Worker Taxes

As a resident of Hawaii earning income as a Turo host, you are required to file a Hawaii state income tax return. Hawaii operates on a graduated income tax system, meaning the tax rate increases as your income rises. This differs from a flat tax, where everyone pays the same percentage. The Hawaii Department of Taxation closely monitors income earned through gig economy platforms, and accurate reporting is vital to avoid penalties. For self-employed individuals, including Turo hosts, the primary form used to report income is Form N-11, the Hawaii Individual Income Tax Return. You will need to calculate your net earnings from Schedule C and transfer that amount to Form N-11. Hawaii also has a General Excise Tax (GET) which may apply to your Turo income depending on your gross revenue. Generally, if your gross receipts exceed $100,000, you are required to register for and file GET. It's important to note that Hawaii's tax laws can be complex, and consulting with a qualified tax professional familiar with Hawaii's specific regulations is highly recommended. Staying informed about changes to state tax laws is also crucial. You can find more information and resources on the Hawaii Department of Taxation website: https://tax.hawaii.gov/

Top Tax Deductions for Hawaii Drivers

• Standard Mileage: The most popular deduction for Turo hosts. For the 2025 tax year, the standard mileage rate is 70 cents per mile. Given the cost of maintaining a vehicle across the Hawaiian Islands, including ferry costs if applicable, this rate can significantly reduce your taxable income.
• Tolls & Parking: While Hawaii doesn't have traditional toll roads, parking fees incurred while preparing vehicles for rental or during pick-up/drop-off are deductible. Keep detailed records of these 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 to keep your vehicle rental-ready, phone mounts for renters, or even small amenities offered to guests 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 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. Because Turo and other gig platforms don't withhold these taxes from your earnings, it's your responsibility to calculate and pay them, typically through estimated tax payments throughout the year. This tax is applied to your net earnings – your gross income minus your business deductions – exceeding $400.