Turo Host Taxes in New Jersey - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in New Jersey

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

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 – covering Social Security and Medicare – will be due on net earnings exceeding $400. Accurate record-keeping of all income and expenses is paramount.

How New Jersey Handles Gig Worker Taxes

As a resident of New Jersey, you are required to file a New Jersey state income tax return, even if no state income tax is ultimately due. New Jersey operates on a graduated income tax system, meaning the tax rate increases as your income rises. Turo income is considered part of your overall adjusted gross income (AGI) and is subject to these graduated rates. The primary form for self-employed individuals to report income and calculate tax liability is Form NJ-1040, along with Schedule NJ-EIC for Earned Income Credit if applicable. New Jersey also requires you to pay estimated taxes quarterly if you expect to owe $500 or more in taxes for the year. Failure to do so can result in penalties. New Jersey does not offer a specific deduction for the standard mileage rate that mirrors the federal deduction; however, you can deduct actual vehicle expenses. It's important to consult the New Jersey Division of Taxation website for the most up-to-date information on tax rates, forms, and filing deadlines. New Jersey also has a sales tax component related to rentals, which Turo generally handles, but it's wise to confirm your responsibilities as a host. Keep detailed records of all rental income and expenses to ensure accurate reporting and maximize potential deductions.

For more information, visit the New Jersey Division of Taxation.

Top Tax Deductions for New Jersey Drivers

• Standard Mileage: The #1 deduction for many Turo hosts. The 2025 rate is 70 cents per mile. Given New Jersey's relatively high cost of living and frequent traffic, the standard mileage rate often provides a significant tax benefit.
• Tolls & Parking: New Jersey drivers frequently encounter tolls on the New Jersey Turnpike and Garden State Parkway. These tolls, along with parking fees incurred directly for Turo rentals, are deductible business expenses.
• Phone & Data Plan: If you use your phone for managing bookings, communicating with renters, or navigating to rental locations, you can deduct the percentage of your phone and data plan that relates to business use.
• Vehicle-Related Costs: Expenses like car wash supplies, air fresheners, phone mounts, and any items purchased specifically for enhancing the rental experience are deductible.

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 greater deduction.

Understanding the 15.3% Self-Employment Tax

This tax covers both Social Security and Medicare, and it's important to remember that platforms like Turo do not withhold these taxes from your earnings. You are responsible for calculating and paying this tax, typically through estimated tax payments made quarterly to the IRS.