Turo Host Taxes in Kentucky - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in Kentucky

Sharing your vehicle on Turo offers a flexible income stream, but as a Kentucky host, understanding the tax implications is crucial for a smooth experience during the 2025 tax season. Revenue generated through Turo is considered taxable income by both the federal government and the Commonwealth of Kentucky.

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) will be due on net earnings exceeding $400. Accurate record-keeping throughout the year is essential to maximize deductions and minimize your tax liability.

How Kentucky Handles Gig Worker Taxes

As a resident of Kentucky, you are required to file a state income tax return, even if no Kentucky income tax is due. Kentucky operates under a flat income tax rate, currently at 4.0% for the 2025 tax year. Income earned through Turo is subject to this flat tax. Self-employed individuals, including Turo hosts, will report their earnings and calculate their Kentucky income tax liability using Form 740, Kentucky Income Tax Return for Individuals. Specifically, Schedule SE, Self-Employment Earnings, will be used to calculate the amount of income subject to Kentucky income tax. Kentucky also allows for a deduction for the federal self-employment tax paid, which can reduce your overall state tax burden. It’s important to note that Kentucky does not have a separate self-employment tax; the state income tax calculation incorporates the federal self-employment tax paid. Kentucky’s Department of Revenue provides detailed information and resources for self-employed individuals, including frequently asked questions and filing instructions. Staying informed about any changes to Kentucky tax laws is vital for accurate filing. Remember to keep detailed records of all income and expenses related to your Turo hosting activity to support your tax return.

You can find more information on the Kentucky Department of Revenue website: https://revenue.ky.gov/

Top Tax Deductions for Kentucky Drivers

• Standard Mileage: The most popular deduction for Turo hosts. The 2025 rate is 70 cents per mile. Given Kentucky’s relatively moderate gas prices, the standard mileage rate is likely to be a beneficial option for most hosts.
• Tolls & Parking: While Kentucky doesn’t have extensive toll roads, any tolls incurred during vehicle delivery or pick-up, as well as parking fees directly related to Turo rentals, are deductible.
• Phone & Data Plan: If you use your phone for Turo-related communication, scheduling, or managing your listings, you can deduct the percentage of your phone bill attributable to business use.
• Vehicle-Related Costs: Expenses like car wash supplies, air fresheners, phone mounts for renters, or 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, 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 of these taxes. Turo and other rental platforms do not withhold these taxes from your earnings, so it’s crucial to plan for this expense when filing your federal tax return.