Turo Host Taxes in Rhode Island - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in Rhode Island

Sharing your vehicle through Turo offers a flexible income stream, especially with Rhode Island’s beautiful coastline attracting visitors year-round. 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 Rhode Island Handles Gig Worker Taxes

Rhode Island, like most states, requires residents to file a state income tax return, even if only to report self-employment income. As a self-employed individual earning income through Turo, you’ll need to report your net earnings (income minus deductible expenses) on Form RI-1040, Rhode Island Resident Income Tax Return. Rhode Island operates on a graduated income tax system, meaning the tax rate increases as your income increases. For the 2025 tax year, the rates are expected to remain similar to prior years, ranging from 3.75% to 9.99%. It’s important to note that Rhode Island also has a minimum tax calculation that may apply, even if your calculated tax liability is lower. Furthermore, Rhode Island requires estimated tax payments if you expect to owe $1,000 or more in state income tax. These payments are typically made quarterly. Failure to make timely estimated payments can result in penalties. Detailed information regarding Rhode Island tax laws and forms can be found on the Rhode Island Division of Taxation website: https://www.ri.gov/taxation/. Keep meticulous records of all income and expenses to ensure accurate reporting and maximize potential deductions.

Top Tax Deductions for Rhode Island Drivers

• Standard Mileage: The #1 deduction for many Turo hosts. The 2025 rate is 70 cents per mile. Given Rhode Island’s relatively small size, the standard mileage rate is often the most advantageous method for calculating vehicle expenses.
• Tolls & Parking: Rhode Island drivers frequently encounter tolls on I-95 and other major roadways. Keep detailed records of all toll expenses and parking fees incurred while your vehicle is being rented.
• 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 to keep your vehicle presentable for renters, phone mounts for navigation, or even small amenities offered to renters 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

This tax covers both Social Security and Medicare, and it’s important to remember that Turo, or any other rental platform, does not withhold these taxes from your earnings. You are responsible for calculating and paying this tax when you file your federal income tax return. You can reduce your self-employment tax liability by deducting one-half of your self-employment tax from your adjusted gross income.