Turo Host Taxes in Virginia - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in Virginia

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

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 income and expenses is paramount.

How Virginia Handles Gig Worker Taxes

As a resident of Virginia, you are required to file a state income tax return, even if your only income is from Turo. Virginia operates on a graduated income tax system, meaning the tax rate increases as your income increases. This differs from a flat tax rate. Turo income is considered part of your 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 Virginia Form 540, with Schedule C attached to detail business income and expenses. Virginia also allows for itemized deductions, which can further reduce your taxable income. It's important to note that Virginia does not automatically withhold state income tax from your Turo earnings; therefore, quarterly estimated tax payments may be required to avoid penalties, especially if you anticipate owing more than $1,000 in state taxes. The Virginia Department of Taxation provides resources and tools to help estimate your tax liability and make timely payments. Failure to file and pay on time can result in penalties and interest. Virginia also conforms to many federal deductions, but it's essential to verify specific rules on the Department of Taxation website.

For more information and resources, please visit the Virginia Department of Taxation: https://www.tax.virginia.gov/

Top Tax Deductions for Virginia Drivers

• Standard Mileage: The most popular deduction for Turo hosts. The 2025 rate is 70 cents per mile. Given Virginia’s diverse terrain and potential for longer trips to destinations like the beaches or mountains, this rate can significantly reduce your tax burden.
• Tolls & Parking: Virginia has several toll roads, including the Dulles Toll Road and parts of I-95. Keep detailed records of all toll expenses and parking fees incurred while your vehicle was rented.
• Phone & Data Plan: If you use your phone for managing bookings, communicating with renters, or for vehicle tracking, you can deduct the business-related percentage of your monthly bill.
• Vehicle-Related Costs: Expenses like car wash supplies, air fresheners, phone mounts for renters, and even small amenities can be deducted as 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 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. Platforms like Turo do not withhold these taxes, so it’s crucial to factor this into your tax planning and potentially make quarterly estimated tax payments.