Turo Host Taxes in Iowa - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in Iowa

Sharing your vehicle on Turo provides a flexible income stream, but as an Iowa resident, understanding the tax implications is crucial for a smooth tax season. Revenue generated through Turo is considered taxable income by both the federal government and the State of Iowa.

The IRS requires Turo hosts to report their earnings on Schedule C (Profit or Loss From Business) as self-employment income. This means not only income tax, but also self-employment tax (Social Security and Medicare) applies to net earnings over $400. Accurate record-keeping of income and expenses is paramount to maximizing deductions and minimizing tax liability.

How Iowa Handles Gig Worker Taxes

As a resident of Iowa, you are required to file a state income tax return, even if your only income is from Turo. Iowa utilizes a graduated income tax system, meaning the tax rate increases as your income increases. For the 2025 tax year, Iowa’s tax brackets are expected to remain similar to prior years, though official rates will be released by the Iowa Department of Revenue. Turo income is considered part of your adjusted gross income and is subject to these graduated rates. Self-employed individuals, including Turo hosts, will primarily use Iowa Form 1040 and Schedule A (Iowa Adjustment to Income) to report their income and calculate their Iowa tax liability. It's important to note that Iowa also has a state estimated tax requirement. If you expect to owe $1,000 or more in Iowa income tax, you may need to make quarterly estimated tax payments to avoid penalties. Iowa also offers various credits and deductions that may apply to your situation, so thorough research is recommended. The Iowa Department of Revenue provides comprehensive information and resources for self-employed individuals; you can find more details at https://tax.iowa.gov/. Remember to keep detailed records of all income and expenses related to your Turo business to accurately complete your Iowa tax return.

Top Tax Deductions for Iowa Drivers

• Standard Mileage: The #1 deduction for many Turo hosts. The 2025 rate is 70 cents per mile. Given Iowa’s relatively stable gas prices, the standard mileage rate is often a beneficial and simplified method for calculating vehicle expenses.
• Tolls & Parking: While Iowa doesn’t have extensive toll roads, any parking fees incurred directly for Turo trips are deductible.
• Phone & Data Plan: The percentage of your phone and data plan used for managing your Turo business (communication with renters, managing listings, etc.) is deductible.
• Vehicle-Related Costs: Expenses like car cleaning supplies, air fresheners, phone mounts for renters, and any items provided to enhance the rental experience 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 greater 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. Platforms like Turo do not withhold these taxes, so it’s crucial to factor this into your tax planning and potentially make estimated tax payments throughout the year.