Turo Host Taxes in Vermont - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in Vermont

Sharing your vehicle on Turo offers a flexible income stream, especially with Vermont’s scenic routes attracting tourists 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 Internal Revenue Service (IRS) considers your earnings self-employment income. This means you’ll report your profits and losses on Schedule C (Profit or Loss From Business) when filing your federal income tax return (Form 1040). Crucially, earnings over $400 necessitate the payment of self-employment taxes, covering both Social Security and Medicare contributions, which are not automatically withheld by Turo.

How Vermont Handles Gig Worker Taxes

Vermont, known for its independent spirit, extends that to its tax system. As a resident of Vermont earning income through Turo, you are required to file a Vermont state income tax return, even if your federal tax liability is zero. Vermont operates on a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, self-employed individuals will primarily use Form INC-100, Individual Income Tax Return, to report their Turo income. Vermont also requires you to pay estimated taxes quarterly if you expect to owe $500 or more in state income tax. Failure to do so can result in penalties. Vermont treats Turo income as business income, and you can deduct related business expenses to reduce your taxable income. Vermont also has specific rules regarding the apportionment of income if you operate your Turo vehicle across state lines, though this is less common for typical Turo hosts. It’s important to note that Vermont conforms to many federal tax provisions, but it’s always best to verify specific deductions and credits with the Vermont Department of Taxes. Vermont’s tax laws are subject to change, so staying informed is crucial for accurate filing.

Top Tax Deductions for Vermont Drivers

• Standard Mileage: The most popular deduction for Turo hosts. The 2025 rate is 70 cents per mile. Given Vermont’s rural landscape and potential for longer trips to and from rental locations, this rate can significantly reduce your tax burden.
• Tolls & Parking: While Vermont doesn’t have extensive toll roads, any tolls incurred during Turo trips, as well as parking fees directly related to vehicle rentals, 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 to maintain a clean vehicle for renters, phone mounts for navigation, or even small amenities offered to renters (like phone chargers) are deductible.

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 greater deduction.

Understanding the 15.3% Self-Employment Tax

This tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. Because Turo and other gig platforms do not withhold these taxes, it’s your responsibility to calculate and pay them, typically through estimated tax payments made quarterly to the IRS. Remember, this tax applies to your net earnings – your Turo income minus your deductible business expenses.