Welcome to the ultimate guide on how to file Turo taxes! If you are a car rental enthusiast using Turo to rent your car, you are in the right place.
Filing Turo’s income taxes can be tricky, but don’t worry; we’ve got you covered.
In this comprehensive guide, we’ll take you through the entire process, step by step.
- Turo hosts are required to file taxes on their earnings, and the process involves accessing tax information forms, accurately reporting income, and deducting expenses.
- The 1099 tax form is used to report income from Turo, and hosts should contact Turo customer support if they do not receive this form by January 31.
- Turo hosts can file their taxes using IRS forms 1040 or 1040-SR or tax software, and they should choose between Schedule C and Schedule 1 for reporting their income.
- Deductible expenses for Turo hosts include car-related expenses, Turo fees, and insurance costs, which can be reported on Schedule C or Schedule 1.
- There are several tools available for Turo hosts to manage their taxes, such as Keeper Tax, Sharelytics, and TurboTax, and hosts should consider the pros and cons of each tool before choosing the one that best fits their needs.
Understanding Turo Tax Forms
A. How to Access Tax Information Form on Turo Website
The first step to filing your Turo taxes is to access your tax information form on the Turo website.
Here are the steps to follow:
- Log in to your Turo account and go to the “Account” section.
- Click on “Tax information” and select the appropriate tax year.
- Review the information on the form to ensure it is accurate and complete.
B. Explanation of 1099 Tax Form and Its Purpose
Turo will send you a 1099 tax form detailing the money you earned from renting out your car on their platform.
The purpose of this form is to report your income to the IRS.
The 1099 form is divided into two parts:
- Box 1 – This shows your gross earnings from Turo
- Box 7- shows the amount of fees that Turo charged you.
C. What to Do If You Don’t Receive a 1099 Form
If you don’t receive a 1099 form from Turo, you still have to report any income you earned to the IRS.
You can do this by filling out Schedule C or Schedule 1, depending on the service you use.
It is vital to keep track of your earnings and expenses throughout the year so that you can accurately report your income and deductions when tax time comes.
Filing Taxes for Turo Earnings
If you’ve earned income through Turo, you are required to report it on your tax return. Below are some tips for accurately reporting your Turo income:
a. Filing options: You can file your taxes using IRS form 1040 or 1040-SR if you are over 65 years old.
Another option is to use tax software, which can simplify the process for you.
b. Differences between Schedule C and Schedule 1 for filing: If you are using Form 1040, you will need to fill out Schedule C.
This form is used to report income or loss from a business, including any income earned from Turo.
However, if you use Form 1040-SR or tax software, you must use Schedule 1 instead.
c. Tips for accurately reporting Turo income: When reporting your Turo income, make sure to include all earnings from your rentals, including any fees that Turo may have deducted.
Keep accurate records of your expenses, such as gas, maintenance, and cleaning fees, as these can be deducted from your earnings.
Finally, remember to report any taxes you may have paid to Turo, which can also be deducted from your taxable income.
Deducting Turo Expenses
As a Turo host, you may be eligible to deduct certain expenses related to your rental business.
Deducting expenses can help reduce your taxable income and save you money on taxes.
Here’s what you need to know:
Types of expenses that can be deducted
- Car-related expenses: This includes gas, oil changes, maintenance, repairs, and insurance.
- Advertising and marketing: You can deduct expenses related to promoting your Turo listing, such as photography, social media advertising, and website design.
- Turo fees: You can deduct Turo’s service fees and other related expenses.
- Home office expenses: If you use a portion of your home as a dedicated office space for your Turo business, you may be able to deduct a portion of your rent or mortgage, utilities, and internet expenses.
How to calculate and report expenses on tax forms
You can deduct expenses using either Schedule C or Schedule E of your tax form.
Schedule C reports profit or loss from a business, while Schedule E reports rental income and expenses.
Be sure to keep accurate records of all your expenses throughout the year and consult a tax professional for guidance on reporting them properly.
Common mistakes to avoid when deducting expenses:
- Deducting personal expenses: Only expenses directly related to your Turo business are deductible.
- Failing to keep accurate records: You must keep detailed records of all your expenses and be able to provide receipts or other proof if audited.
- Failing to consult a tax professional: Tax laws can be complicated, so seeking guidance from a qualified professional is essential to ensure you maximize your deductions and accurately report your income.
Tools for Managing Turo Taxes
Managing your Turo taxes can be overwhelming, especially if you’re doing it for the first time.
Fortunately, there are several tools available to make the process easier.
Here’s an overview of three popular tools:
A. Overview of Keeper Tax, Sharelytics, and TurboTax
i. Keeper Tax – Keeper Tax is an AI-powered expense tracking tool designed specifically for gig workers.
It automatically finds tax write-offs and sends you receipts via email or text.
Keeper Tax integrates with TurboTax, making it easy to import your tax write-offs.
ii. Sharelytics – Sharelytics is a comprehensive management tool that allows you to track your rental activity on Turo.
It provides detailed insights into your revenue, expenses, and occupancy rates.
Sharelytics also offers a tax report feature that makes filing taxes a breeze.
iii. TurboTax – TurboTax is a popular tax preparation software that helps individuals file their taxes accurately and efficiently.
It offers a self-employed version that is ideal for gig workers.
TurboTax integrates with Keeper Tax, making it easy to import your tax write-offs.
B. Pros and cons of each tool
|Keeper Tax||AI-powered, automatic expense tracking||Limited rental activity tracking|
|Sharelytics||Comprehensive rental activity tracking||Expensive subscription cost|
|TurboTax||Popular and trusted tax preparation software||Limited rental activity tracking; may require manual expense input|
C. Tips for choosing the best tool for your needs
Consider your specific needs and budget when choosing a tool to manage your Turo taxes.
If you’re looking for automatic expense tracking, Keeper Tax may be your best option.
Sharelytics may be the way to go if you want comprehensive rental activity tracking.
And if you’re looking for a popular and trusted tax preparation software, TurboTax may be the best fit.
Compare each tool’s pros and cons to find the best one for your needs.
Managing your taxes as a Turo host can be overwhelming, but it can be a breeze with the right tools and knowledge.
From understanding tax forms to filing accurately and deducting expenses, the essential steps highlighted in this article will keep your Turo earnings in good standing with the IRS.
By utilizing tools such as Keeper Tax, Sharelytics, and TurboTax, you can simplify the process and focus on what really matters: growing your Turo business.
Frequently Asked Questions
What tax forms do I need to file for Turo earnings?
You need to file either a Schedule C or Schedule 1 with your IRS Form 1040 or 1040-SR to report your Turo income.
Can I deduct expenses related to my Turo car rental business?
Yes, you can deduct expenses such as car maintenance, insurance, and cleaning supplies on your tax return.
What happens if I don’t receive a 1099 form from Turo?
You are still required to report your Turo income on your tax return, even if you don’t receive a 1099 form.
Keep track of your annual earnings and expenses to report your income accurately.
What are some tools I can use to manage my Turo taxes?
Keeper Tax, Sharelytics, and TurboTax are popular tools to help manage Turo taxes.
Each has its own pros and cons, so choose the one that best fits your needs.
Joy is an expert when it comes to peer-to-peer rentals and therefore deals predominantly with topics from this area at Rentalero. Her favorite platform: Turo.