Turo Host Taxes in Montana - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in Montana

Sharing your vehicle on Turo offers a flexible income stream, especially with Montana’s stunning landscapes attracting tourists eager for independent exploration. However, that income is subject to both federal and state taxes, requiring careful record-keeping and understanding of applicable regulations.

As a Turo host, the IRS considers income earned from renting your vehicle as self-employment income. This means it must be reported on Schedule C (Profit or Loss from Business) with your Form 1040. Crucially, this income is also subject to self-employment tax, covering both Social Security and Medicare taxes, which are not automatically withheld by Turo.

How Montana Handles Gig Worker Taxes

Montana, known as the Treasure State, requires residents to file a state income tax return, even if the only income is from self-employment activities like Turo hosting. Montana operates on a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Montana residents earning income from self-employment will need to file Form 17, Montana Individual Income Tax Return. This form is used to calculate your state income tax liability based on your federal adjusted gross income and any applicable Montana adjustments. Montana also has provisions for deducting business expenses, mirroring many of the federal deductions, which can help reduce your overall tax burden. It’s important to note that Montana’s Department of Revenue actively monitors gig economy income, so accurate reporting is essential. Furthermore, Montana does not have a separate self-employment tax like the federal government; instead, self-employment income is simply added to your overall adjusted gross income and taxed at the applicable graduated rate. Keep detailed records of all income and expenses to ensure accurate filing and avoid potential penalties. Montana’s tax laws are subject to change, so staying informed is crucial.

For more information and resources, please visit the Montana Department of Revenue: https://revenue.mt.gov/

Top Tax Deductions for Montana Drivers

• Standard Mileage: The #1 deduction for many Turo hosts. The 2025 rate is 70 cents per mile. Given Montana’s vast distances and the potential for significant mileage accrued during rentals, this method is often highly beneficial.
• Tolls & Parking: While Montana doesn’t have extensive toll roads, any parking fees directly related to vehicle pick-up or drop-off for Turo rentals are deductible.
• Phone & Data Plan: If you use your phone for Turo-related communication (scheduling, messaging with renters), you can deduct the percentage of your monthly bill attributable 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 like charging cables are deductible business expenses.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses like gas 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 covers 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 tax applies to net earnings (income minus expenses) exceeding $400. You’ll calculate this tax on Schedule SE (Self-Employment Tax) and include it with your Form 1040.