A simple guide to Uber taxes

Thanks to modern technology, driving for services like Uber has become a flexible way to earn money. However, it is important to remember that this work also entails specific tax obligations.

If you are an aspiring entrepreneur planning to drive for Uber, you must know how to monitor your income and expenses—and, more importantly, understand your tax requirements.

It is undeniable that the transportation industry, offering services such as ride-hailing, courier, and food delivery, has grown steadily over the years.

The transportation industry, which includes ride-hailing, courier, and food delivery services, has grown continuously over the years. According to Business of Apps, Uber generated $43.9 billion in revenue in 2024 (an 18% increase over the previous year), making it a sustainable platform for new drivers.

This guide covers the essential information you need to handle your Uber taxes properly, maximize your deductions, and keep more of what you earn.

Do Uber drivers pay taxes?

Yes. Uber drivers are considered independent contractors, not employees. This means the responsibility for taxes falls entirely on the driver, rather than the company.

Unlike a traditional job where an employer withholds taxes from every paycheck, Uber does not deduct taxes from your earnings. Consequently, reporting your income and making manual payments is crucial. At the end of the year, you will receive a Form 1099 instead of a W-2.

Applicable taxes on driver’s rideshare earnings

The IRS requires Uber drivers to pay two main types of taxes:

Self-employment tax

If you earn more than $400 from ridesharing, you are required to file a return and pay self-employment tax.

The self-employment tax rate is 15.3%, which is typically applied to 92.35% of your net earnings. This figure consists of two parts:

• Medicare: 2.9%
• Social Security: 12.4%

Income tax

In addition to the self-employment tax, drivers must pay standard federal (and potentially state) income tax.

While the self-employment tax is a set percentage, your income tax rate varies. It is determined by your total annual income, filing status, applicable tax credits, and the specific tax bracket into which your income falls.

Are there applicable deductions for Uber rideshare expenses?

One advantage of being an independent contractor is the ability to file for business-related deductions to lower your taxable income. 

To help you track these, here is a list of common deductible expenses:

Phone and Data Plan

If you purchase a mobile phone used exclusively for ridesharing (e.g., accepting trips and using GPS), you can write off 100% of the device cost and the monthly data plan. 

If the phone is used for both work and personal activities, you must determine the specific percentage of business use to claim a deduction. Only the portion of the bill directly attributable to your work is deductible.

Vehicle mileage and toll fees

You can significantly reduce Uber taxes by claiming vehicle deductions. Drivers typically use the IRS standard mileage rate, which applies a set cent-per-mile rate to all business miles driven. 

Alternatively, you can track and deduct actual vehicle expenses, including fuel, oil, maintenance, and repairs. 

Beyond mileage, you can also deduct parking fees and tolls that the customer has not already reimbursed.

Uber fees and other vehicle-related expenses

The Form 1099 you receive reports gross fares paid by customers, which do not account for the platform’s service fees. 

You must deduct these fees separately. Additionally, remember to account for other costs like a portion of your car insurance and essential work accessories (e.g., chargers or floor mats). 

Deducting all eligible expenses is vital to avoid overpaying.

How Uber drivers file taxes for ride sharing

Uber earnings are reported on Schedule C, the document used to calculate business profit or loss. This final figure is then transferred to Form 1040, the primary individual income tax return.

These steps will guide you in filing Uber taxes in more detail:

#1 Calculate gross income from rideshare driving

Drivers may receive two different tax forms from Uber:

• Form 1099-K: Per the “One Big Beautiful Bill Act” for the 2025 tax year, this is issued if gross earnings reach $20,000 and 200 transactions. (Note: Thresholds may be lower in some states).

• Form 1099-NEC: This reports non-driving earnings, such as referrals or promotions, once they reach a $600 threshold.

Always report your income, even if you do not receive a 1099. A detailed summary is available in the Uber driver dashboard.

Gross income is entered on Line 1 of Schedule C, Part I, while Uber’s commissions are deducted in Part II to reduce taxable income.

#2 Deduct your rideshare expenses

To minimize your tax bill, ensure you claim all eligible business expenses. 

Your Uber tax summary may not include every personal business expense, so compare your own records against the company’s summary to ensure nothing is missed.

#3 Calculate net profit or loss and self-employment tax

Use Schedule C (lines 28 to 31) to find your net profit or loss, then enter this on Line 3 of Schedule 1. 

Next, use Schedule SE to estimate your self-employment tax. This tax is entered on Line 4 of Schedule 2. 

Notably, you can typically take half of your self-employment tax as an “above-the-line” deduction on Line 14 of Schedule 1.

Maximize your earnings through proper filing of taxes and deductions

Filing correctly ensures you keep as much of your take-home pay as possible. While Uber collects fees per ride, these and other costs are valuable deductions. 

Whether you choose the standard mileage rate or itemize actual expenses, it is essential to document all of your transactions. Doing so ensures you pay only the required amount, helping you validate your efforts and keep more of your earnings.