Turo Host Taxes in Seattle, Washington - 2026

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Turo Hosts in Seattle, Washington

Sharing your vehicle on Turo in the Emerald City is a smart way to tap into Seattle's thriving tech scene and year-round tourism. Whether you're catering to hikers heading to the Cascades or business travelers visiting Amazon's spheres, navigating the tax implications requires more than just a passing glance. As a Seattle host, your Turo earnings are generally classified as self-employment income, which means you're responsible for both federal and local tax obligations.

The IRS expects you to report this rental income on Schedule C (Profit or Loss From Business) as part of your Form 1040. Because Turo doesn't withhold taxes from your payouts, you're responsible for the 15.3% self-employment tax, which covers Social Security and Medicare. However, there's a significant silver lining: the Qualified Business Income (QBI) deduction. Most Turo hosts can deduct up to 20% of their net business income right off the top before income taxes are calculated. It's a powerful tool that can dramatically lower your federal tax bill, provided your taxable income falls below certain thresholds.

How Washington and Seattle Handle Gig Worker Taxes

Washington is one of the few states without a personal income tax, which is a major win for your bottom line. But don't let that fool you into thinking you're entirely off the hook. The state levies a Business and Occupation (B&O) tax, which is a gross receipts tax. While many casual hosts won't reach the current $28,000 annual threshold for B&O liability, those managing a small fleet in high-demand areas like Capitol Hill or near Sea-Tac Airport need to keep a close watch on their revenue.

Beyond state taxes, the City of Seattle has its own requirements. If you're conducting business within city limits, you may be required to obtain a Seattle Business License. This applies even if you're just renting out one car. While the city's own business tax also has a high threshold, the licensing requirement is a common hurdle that many hosts overlook until they're filing their annual returns. You can check the latest rates and registration requirements on the Washington State Department of Revenue website at https://dor.wa.gov/.

Maximize Your Savings: The Advanced Calculator

One of the biggest decisions you'll make is how to write off your vehicle costs. To make this easier, we recommend using our Advanced Calculator to compare your options. The right choice can save you thousands of dollars depending on the type of car you're sharing.

• Standard Mileage vs. Actual Expenses: For 2024 and 2025, the standard mileage rate is a generous way to deduct costs based on the miles driven for business. However, for many Seattle hosts driving newer or more expensive vehicles, the "Actual Expenses" method often yields a bigger deduction. Our calculator allows you to factor in Depreciation, which accounts for the loss in your car's value over time - a huge expense that the standard mileage rate might not fully cover.
• Home Office Deduction: If you use a dedicated space in your home to manage your Turo listings, coordinate cleanings, or handle guest communication, you can calculate "Home Office" savings through our tool. Even a small nook can translate into a deduction for a portion of your rent, utilities, and internet.

Top Tax Deductions for Emerald City Drivers

• Cleaning and Maintenance: Given Seattle's rainy climate and the salt used on roads during winter freezes, car washes and interior detailing are essential business expenses. These are fully deductible.
• Parking and Tolls: If you're paying for a dedicated spot at a "Turo-friendly" lot near Sea-Tac or paying for parking during a guest delivery downtown, keep those receipts. While commuting miles aren't deductible, parking during business activities is.
• Vehicle Protection and Tech: Dash cams, GPS trackers, and phone mounts are all deductible. These aren't just for safety; they're legitimate business equipment.
• The Turo Take: Don't forget that the percentage Turo keeps from your bookings is a cost of doing business. You should report your gross earnings and then deduct Turo’s fees as a commission or service expense.

The Bottom Line on Self-Employment Tax

If your net earnings from Turo exceed $400, you'll trigger the 15.3% self-employment tax. It's easy to be caught off guard by this at the end of the year, so we recommend setting aside roughly 25% to 30% of your net profit for quarterly estimated tax payments. This ensures you're not hit with a massive bill and potential underpayment penalties in April. By using the QBI deduction and choosing the best vehicle deduction method via our Advanced Calculator, you can keep more of your hard-earned Seattle rental income in your own pocket.