As a Turo host, you are running a business. The money you earn comes with a price tag: self-employment taxes. The great news is that almost every dollar you spend to make money is a dollar you can subtract from your income.
This guide provides a full checklist of deductible expenses for US hosts filing as sole proprietors. Getting this right means paying tax on your profit, not your total revenue.
Your Filing Foundation: Schedule C & SE
Turo will send you a 1099 form showing your gross earnings. The IRS treats you as a self-employed business owner. To report your income and expenses, you need to use Schedule C (Profit or Loss From Business) and Schedule SE (Self-Employment Tax). Every deduction you successfully claim goes onto Schedule C, shrinking your final business profit and lowering the amount of tax you owe.
Vehicle Expenses—Mileage or Actual Costs?
The biggest decision you face involves deducting costs for the car itself. You must choose one of two methods for each vehicle.
Option A: The Simple Choice: Standard Mileage Deduction
This method is the simpler route. You only need to track the total miles you drive for your business. The IRS grants you a flat rate deduction for each mile. For 2024, that rate is 67 cents per business mile.
This rate covers nearly everything associated with the car itself—gas, maintenance, tires, insurance, and depreciation are all included in that 67 cents. You cannot deduct those items separately when you use this rate.
You can still deduct certain costs separately: tolls, parking fees you pay for business, and the interest paid on your car loan.
If you use this method the first year the car is used for business, you have the option to switch to the Actual Expenses method in a later year if your maintenance costs go up.
Option B: The Detailed Choice: Actual Expenses
If your vehicle is expensive to run—maybe it’s a luxury car with high depreciation or a large vehicle with low gas mileage—the Actual Expenses method is often better.
To use this method, you must track every single dollar spent on the vehicle. Keep every receipt. If you use the vehicle for both Turo and personal trips, you must calculate the exact business percentage.
If the car drives 10,000 miles in a year, and 8,000 of those miles were for Turo trips or related business tasks, your business percentage is 80%. You can deduct that 80% of all expenses.
The Actual Expenses Checklist
If you choose the Actual Expenses method, you can claim the business-use percentage of the following costs:
Operating Costs
Track every dollar spent on gas, oil, and fluids. These are your most frequent business expenses. Keep your receipts digitized so they are easy to find at tax time.
Maintenance, Repairs, and Insurance
Every cost that keeps the car running is deductible. This includes routine servicing like oil changes, new tires, brake service, and any major, unexpected repairs. Your insurance premiums are deductible as well. Simply take the total amount paid for premiums and multiply it by your business-use percentage.
Financing Costs and Fees
You can deduct the business-use percentage of the loan interest paid on the car loan throughout the year. Remember, you cannot deduct the principal payment, only the interest. State registration fees, license plates, and safety inspections are also deductible based on your business percentage.
Vehicle Cleaning
The cost of keeping your vehicle spotless is 100% deductible if the cleaning is done specifically to prepare the car for a renter. Track all receipts for car washes, detailing services, vacuums, cleaning chemicals, and even air fresheners.
Investment Write-Offs (The Purchase Price)
Deducting the car's original purchase price is one of the largest tax savings available. This is done through Depreciation, which allows you to deduct the cost of the vehicle over several years.
Accelerated Depreciation
Two powerful tools, Section 179 and Bonus Depreciation, let you deduct a very large portion of the vehicle’s cost in the very first year you put it into service. To utilize these accelerated methods, one key rule applies: the car must be used for business more than 50% of the time.
If you drive a car personally more than you rent it out, you cannot use these beneficial deductions. Vehicles like SUVs, trucks, and vans weighing over 6,000 pounds often qualify for a higher maximum Section 179 deduction ($30,500 for 2024), making them popular additions to a fleet.
Operational & Overhead Expenses
Your business costs go beyond the vehicle itself. These deductions reduce your taxable income dollar for dollar.
Turo Platform and Travel Fees
All Turo service fees and marketplace commissions are expenses. These amounts are automatically subtracted from your earnings, but you must report them as a business expense to balance the gross income shown on your 1099. Track business travel costs like tolls, parking fees, and airport fees when incurred while dropping off, picking up, or transporting the car for maintenance.
Office and Communication
If you have a dedicated, regular space you use only for managing your Turo business, you may be able to claim the Home Office deduction. This applies to a portion of your rent, utilities, or mortgage. You can also deduct office supplies like printers, logbooks, and software subscriptions (such as accounting or booking apps). A portion of your phone and internet bills that matches your business use (e.g., 50% if you spend half your phone time on Turo calls/apps) is also deductible.
Customer Amenities and Professional Services
Fees paid to your CPA, tax preparer, or bookkeeper are fully deductible business expenses. You can deduct the cost of small amenities for your guests, such as water, snacks, gum, or air fresheners. You can generally deduct 50% of the cost of business meals you have with a fellow host or mentor to discuss your business strategy.
Final Tip: Record Keeping is Everything
The key difference between a successful deduction and a rejected one is your documentation. The IRS needs proof.
First, use a dedicated bank account and credit card for Turo expenses to keep business and personal finances separate.
Second, maintain a detailed Mileage Log of every business trip. This log should include the date, the destination, the reason (e.g., "drop-off at airport," "oil change at mechanic"), and the miles driven.
Third, digitize and save every receipt for the Actual Expenses method. Cloud storage keeps them safe and organized for years.
Disclaimer: This is for informational purposes only and is not tax advice. Consult a qualified tax professional or CPA to discuss your specific situation and ensure compliance with all federal and state laws.