so there's a new investing and business trend out there and it's to start a rental car company with
turo and there are already people who are making hundreds and thousands of dollars a day with their
rental car company using turo but it's still a fairly new trend and a lot of people are learning
throughout the way and as we know eventually tax time will come so what i want to do in this
video is give you guys my top tax write-offs for a toro rental car company so that you can leverage
the tax system in a way that will maximize your profits and reduce your tax liability stay tuned
hey everyone welcome back to the channel you look great by the way i'm sean with life accounting the
accounting company that saves people from high taxes and low profits alright so for anyone who
hasn't heard yet let me quickly very quickly talk about what a rental car company is and a little
bit about tarot so what is a rental car company so the concept of a rental car company is very simple
you have a car you rent it out someone pays you for every day they're using your car and maybe
a little bit more for the mileage that they put on your car and then eventually they return the
car back to you previously if someone wanted to go out and start a rental car company they
needed hundreds of thousands of dollars maybe even millions of dollars so that they can go out and
buy the inventory for all the cars get a sizeable location and then hire the staff to manage
all the day-to-day operations and as we know only big companies could afford that so companies like
enterprise hertz avis etc but with the evolving technology that's happening in the world
things have changed just like the hotel industry has been disrupted by airbnb the rental car
industry is now being disrupted by toro so what is toro basically toro is like the airbnb of cars so
just like with airbnb you can list your home completely for free with toro you can list
your car for rent completely for free and then all the communication between the people who want to
reserve your car and the owners are done through the app the big difference that i've seen between
airbnb and toro is that with airbnb you don't have to physically meet anyone right like you can give
them remote access to your home and then they just walk in whereas with turros sometimes you need to
physically hand over your car and then figure out a way to get back to your desired location
so right now for most people turo can be a little bit more of a hassle especially if you're looking
to build passive income from renting your car without little help but it can absolutely be
done now before we get into the tax write-offs we have to talk about how income is reported for a
toro company so according to toro if you made over 20 000 a year and you had over 200 trips
then you will receive what is called a 1099k which will report how much income you made usually about
a month and if you made less than twenty thousand dollars then you may not receive at 10.99k but
guys even if you don't receive that 1099k you still need to report your income from your turo
business so that means you need to maintain bookkeeping keeping track of all your revenues
and your expenses and any other assets that you purchase on your own and then of course if you are
someone like a sole proprietor or a single member llc then you will need to report your revenues on
your schedule c return when you file your personal taxes all right so the tax write-offs i'm going
to share with you today are write-offs i will give to someone if they're trying to build an
absolutely passive again an absolutely passive toro rental car company so their car can earn
money while they sleep but before i dive into the tax write-offs please do us a huge favor and
hit that like button it will drastically help us to reach more people who want to learn more
about the top tax write-offs for touro company and it just makes us really happy and as a thank you
for hitting the like button here's a cute picture of a pikachu car all right so tax write-off number
one insurance if there's one thing that we all know about renters is that they don't always
take care of the property like it's their own and if you're anything like me then you're probably a
little concerned about someone having your car and absolutely destroying it from the inside
out so that's why car insurance in this case is so important and because this is a business
you're going to want to get the top tier level of insurance that you can get
so you have the most protection especially if you have a top-tier level car now i'm not going to go
through all the specifics of what you need to look for for insurance but what you should know is that
you can absolutely write off car insurance for your business in addition to the actual
car insurance you may also need some general business insurance to protect your car from
an outrageous claim hey sean look there's a bunch of lawyers coming after you freeze
all right so kind of like that now insurance is definitely a great write-off for you now
moving on to tax write-off number two is a pickup location now of course
this is optional but if you want to make your rental car company totally passive and you
want to maximize your chances of actually getting bookings then having a convenient pickup location
may be worth investing into so this would technically be like a rent expense where you find
maybe a nearby lot or a nearby garage right and maybe it's near a convenient location like near
airport or another big rental car company so ideally you work with the garage or the
lot owner you run out of space and maybe you get like a lock box or something like that so you can
drop the keys into and send pick up and drop off instructions to the person who is booking your car
so just an idea and of course i know there's a lot of other ways that maybe you can handle this but
the key takeaway here is that you can totally write off any lots or barrage as a rent expense
for your toro rental car company all right tax write-off number three hire a staff or a manager
so just like you would hire a property manager for like a real estate deal you could hire what
i would call a fleet manager for your rental car company and of course this is optional
but if you want your car company be totally hands off totally passive then you could have someone
else doing all the heavy lifting like dropping off a car to your renters and then picking your car
up this is especially especially important if you want to build and scale a big operation meaning
that you want to have 10 20 or 30 cars on the road you're definitely going to need some staff
to help you out with all those moving parts all right tax write-off number four
you probably saw this coming but it's vehicle expenses so you can write off anything in the
categories that i'm going to share with you in just a second and then you'll be able to multiply
by the business use percentage to get your actual tax right off so here's what you can write off
any maintenance expenses so this would be stuff like oil changes tire rotations air filters etc
you can also write off repairs so if you need to replace the tires or replace the engine or
the transmission for example you can write off the cleaning and car washes as long guys as it's 100
related to your toro company you can even write off your car registration and fees that maybe your
state or your city charges you and of course the big write-off is the depreciation of your car's
value now one other possible deduction worth mentioning is that you can deduct the least cost
if the car you are renting out is lease now if you're doing this then you should always check the
stipulations of your lease before renting out your car and see if it's okay per your lease agreement
that you are starting a rental car company with your leased car now if you want to learn more
about how vehicle tax write-offs work and make sure you watch my video on how to write off your
dream card right after this point and i'll also put a link to that video in the description below
now before we move on to our fifth text right off i want to hear from you okay are you thinking
about starting a torah rental car company tell us in the comments section below and if enough people
comment then i will consider making a step-by-step video on how you can incorporate and actually get
your rental car company set up all right moving along tax write-off number five turo fees i know i
know fees are so annoying but hey toro has to make money somehow and they're providing us with such
an incredible opportunity and building demand for us to be able to rent out our cars so of course
there are fees that you can incur and if you happen to encounter them throughout the way don't
worry because at least these fees are something that you can write off so some popular fees that
you may encounter are host trip cancellation fees that happen if you cancel a trip in less than 24
hours if you are the host there are also hosts no show fees cleaning violation fees and vehicle
misrepresentation fees just to name a few okay so there are fees associated with toro and you can
write them off if you encounter them all right tax write-off number six marketing and advertising as
i just mentioned with turo they do a lot of heavy lifting when it comes to actually marketing and
advertising the cars that people can rent out but if you want to be proactive and ensure your
success then you may want to consider running ads on other card directories so that you get more
bookings or maybe you just decide that you want to build a website for your tour rental
car company or maybe you want to do a little social media marketing the good news here is
that all the marketing and advertising expenses that you incur hopefully build your business up
are all deductible in all tax write-offs for your company tax write-off number seven the home office
deduction hey at some point you have to manage the operations of your toro rental car company
and unless you have a big fleet then i'm guessing that you're doing most of your work from home
well by turning one of your rooms or areas in your house and using it for office space then
you're able to claim the home office deduction which will give you a nice boost when you're
ready to take some tax write-offs especially especially since you don't actually have to spend
any more money for this tax write-off now we have plenty of videos on how the home office deduction
works and we explain everything step by step so i'm gonna go ahead and put a link to one of
those videos in the description below all right so there you have it my seven top tax write-offs if
you want to start a toro rental car company now of course there are many more write-offs that you can
potentially claim but these are going to be some of the most obvious ones that you have to take
all right so this was helpful don't forget to comment and share your thoughts especially if
you're thinking about starting a toro rental car company and you want to see us make a video on how
to get it off the ground and actually set it up step by step all right and we have two more videos
coming up next so make sure you check those out if you haven't already and we'll see you over there