Turo Host Taxes in Tennessee - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in Tennessee

Sharing your vehicle on Turo offers a flexible income stream, especially with Tennessee’s beautiful scenery attracting tourists eager to explore the Great Smoky Mountains and vibrant cities like Nashville and Memphis. However, alongside the benefits comes the responsibility of accurate tax reporting.

As a Turo host, the income earned is considered self-employment income and must be reported to the IRS 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, which Turo does not withhold. Proper record-keeping throughout the year is essential to maximize deductions and minimize your tax liability.

How Tennessee Handles Gig Worker Taxes

Tennessee stands out as a state with no state income tax, a significant benefit for residents and gig workers alike. This means Turo hosts in Tennessee won’t file a state income tax return based on their earnings from the platform. However, this does not exempt you from federal income tax and self-employment tax obligations. The lack of state income tax often means Tennessee residents bear a slightly higher burden of federal taxes, as there's no offsetting state tax liability. It’s particularly important for Turo hosts to diligently track income and expenses to accurately calculate their federal tax liability. While Tennessee doesn’t have a specific classification for “gig workers,” the IRS treats Turo hosts as independent contractors, requiring them to manage their own tax obligations. Furthermore, Tennessee does not currently have a specific revenue threshold that triggers sales tax collection for car sharing; however, federal regulations still apply. Staying informed about potential changes in federal tax law impacting gig economy workers is crucial. For more information on Tennessee state taxes and business resources, please visit the Tennessee Department of Revenue.

Top Tax Deductions for Tennessee Drivers

• Standard Mileage: The most popular and often simplest deduction. For the 2025 tax year, the standard mileage rate is 70 cents per mile. Given Tennessee’s relatively stable gas prices, this rate provides a substantial benefit for Turo hosts.
• Tolls & Parking: While Tennessee doesn’t have extensive toll road networks, any tolls incurred during Turo trips are deductible. Parking fees directly related to vehicle rentals are also deductible.
• Phone & Data Plan: If you use your phone for Turo-related activities (communication with renters, managing listings, etc.), 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, 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, repairs, insurance) in the same tax year. Choose the method that yields the larger deduction.

Understanding the 15.3% Self-Employment Tax

The 15.3% self-employment tax is comprised of two parts: 12.4% for Social Security and 2.9% for Medicare. Unlike traditional employment, platforms like Turo do not withhold these taxes from your earnings. You are responsible for calculating and paying this tax on your net earnings (income minus business expenses) exceeding $400. This tax is paid through estimated tax payments throughout the year (typically quarterly) to avoid penalties.