Turo Host Taxes in Minnesota - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in Minnesota

Sharing your vehicle on Turo provides a flexible income stream, but navigating the tax implications as a Minnesota resident requires careful attention. Revenue generated through Turo is considered taxable income, and understanding your obligations is crucial for avoiding penalties.

The IRS requires Turo hosts to report their earnings as self-employment income on Schedule C (Profit or Loss From Business) with Form 1040. Because you are considered self-employed, you'll also be responsible for paying self-employment taxes, which cover both Social Security and Medicare. This is in addition to your regular income tax liability.

How Minnesota Handles Gig Worker Taxes

As a resident of Minnesota, you are required to file a state income tax return, even if your only income is from Turo. Minnesota utilizes a graduated income tax system, meaning the tax rate increases as your income rises. This means the amount of tax you owe will depend on your total taxable income for the year, including earnings from Turo. The primary form for self-employed individuals to report income and calculate tax liability is Form M1, Minnesota Income Tax Return, along with Schedule 1, which is used to report business income. Minnesota also has a specific form, Schedule IN, for calculating income tax based on your filing status. It's important to note that Minnesota does not offer a separate "gig worker" tax form; Turo income is simply reported as part of your overall self-employment income. Minnesota also has a state sales tax, but Turo generally handles the collection and remittance of this tax on behalf of hosts. However, it's always prudent to review your Turo statements to confirm this. Keep detailed records of all income and expenses related to your Turo business to ensure accurate reporting. For more information and resources, please visit the Minnesota Department of Revenue website: https://www.revenue.state.mn.us/

Top Tax Deductions for Minnesota Drivers

• Standard Mileage: The most popular deduction for Turo hosts. The 2025 rate is 70 cents per mile. Given Minnesota's sometimes harsh winter conditions and the need for frequent vehicle maintenance, the standard mileage rate often simplifies tax preparation.
• Tolls & Parking: While Minnesota doesn't have extensive toll roads, any parking fees incurred while preparing a vehicle for rental or during pick-up/drop-off are deductible.
• Phone & Data Plan: If you use your phone for Turo-related communication (scheduling, messaging renters), you can deduct the percentage of your monthly bill attributable to business use.
• Vehicle-Related Costs: Expenses like car wash supplies, air fresheners, phone mounts for renters, and even small amenities offered to renters 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, or repairs in the same year. Choose the method that yields the largest deduction.

Understanding the 15.3% Self-Employment Tax

This 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. This combined rate is 15.3% on net earnings exceeding $400. Remember to factor this into your tax planning throughout the year to avoid a large tax bill when filing.