How to File Taxes as an Uber Driver

Understanding tax obligations as an Uber driver is a manageable process. Unlike traditional employees who receive a W-2 form and have taxes withheld, Uber drivers are independent contractors responsible for tracking income, identifying deductible expenses, and making regular tax payments throughout the year.

Understanding Your Tax Status and Income

As an Uber driver, you are an independent contractor, meaning you are self-employed for tax purposes. This impacts how your income is taxed. Traditional employees have taxes withheld, but as an independent contractor, you calculate and pay these yourself.

Your income includes all gross fares, bonuses, incentives, and tips received. While Uber provides an earnings summary, you must diligently track all income sources, including cash tips not reported through the platform. Accurate tracking of all earnings is important for proper tax reporting.

Identifying Deductible Business Expenses

Tracking business expenses is important for managing your tax liability as an Uber driver, as these deductions can reduce your taxable income. The Internal Revenue Service (IRS) allows independent contractors to deduct ordinary and necessary business expenses. These are common and helpful costs for your business.

Vehicle expenses are often the most significant deduction for rideshare drivers. You have two primary methods for calculating these: the standard mileage rate or actual expenses. The standard mileage rate accounts for costs such as depreciation, fuel, oil, insurance, and maintenance. If you choose the standard mileage rate, you must keep a detailed log of all business miles driven, including miles driven to pick up passengers, during trips, and between fares.

Alternatively, you can deduct the actual expenses incurred for your vehicle. This method involves tracking all costs related to operating your car for business, such as gas, oil changes, repairs, tires, insurance, registration fees, and a portion of lease payments or depreciation. Regardless of the method chosen for vehicle expenses, tolls and parking fees incurred while driving for business are deductible separately.

Other deductible expenses include a portion of your cell phone bill and internet plan, prorated based on business use, as your phone is essential for accepting rides and navigation. Uber service fees and commissions deducted from your earnings are also deductible business expenses. Costs for professional cleaning of your vehicle, or supplies like bottled water and snacks provided to passengers, are also eligible deductions. Maintaining meticulous records, including receipts and mileage logs, is important to support your deductions.

Calculating and Paying Estimated Taxes

As an independent contractor, no employer withholds taxes from your earnings, making it your responsibility to calculate and pay estimated taxes throughout the year. This ensures income and self-employment taxes (Social Security and Medicare) are paid as income is earned, not in a lump sum. Generally, if you expect to owe at least $1,000 in taxes for the year, you are required to make estimated tax payments.

Estimated tax payments are based on your anticipated net earnings, which is your gross income minus your deductible business expenses. You can use your prior year’s tax return as a guide for estimating your income, deductions, and credits for the current year. The tax year is divided into four payment periods, each with a specific due date. For income earned in 2025, payments are typically due on April 15, June 15, September 15, and January 15 of the following year. If a due date falls on a weekend or holiday, the deadline shifts to the next business day.

You have several options for making estimated tax payments to the IRS, including online through IRS Direct Pay or EFTPS, by mail with Form 1040-ES, or through tax software. Failing to pay enough estimated tax by the due dates can result in penalties, even if you are due a refund when you file your annual return.

Required Tax Forms and Information Gathering

Preparing your annual tax return involves understanding specific tax forms to report income and expenses. The primary forms are Form 1099-NEC, Schedule C (Form 1040), and Schedule SE (Form 1040).

Uber typically issues Form 1099-NEC, Nonemployee Compensation, if you received at least $600 in non-rideshare income. This form reports gross non-employee compensation paid by Uber. Use this information, along with your records, to prepare Schedule C.

Schedule C, Profit or Loss from Business, is where you report your business income and expenses. On this form, you list gross receipts from Uber driving and itemize all deductible business expenses, such as vehicle costs (whether using the standard mileage rate or actual expenses), phone expenses, Uber service fees, and tolls. The net profit or loss calculated on Schedule C is then carried over to your personal income tax return, Form 1040.

Schedule SE, Self-Employment Tax, is used to calculate your Social Security and Medicare taxes, collectively known as self-employment tax. This tax applies to your net earnings from self-employment, covering your contributions to Social Security and Medicare, similar to FICA taxes.

Preparing and Filing Your Tax Return

After tracking income and expenses and gathering necessary forms, prepare and file your annual tax return.

Several options are available for preparing your tax return. You can use commercial tax software programs that guide self-employed individuals through inputting data and completing forms like Schedule C and Schedule SE. Another option is to engage a qualified tax professional, such as a Certified Public Accountant (CPA) or an Enrolled Agent (EA), who can prepare and file your return, ensuring accuracy and maximizing deductions.

The IRS offers free filing options for eligible taxpayers. The IRS Free File program provides access to guided tax software for individuals with an Adjusted Gross Income (AGI) below a certain threshold (e.g., $84,000 for 2024). If your AGI exceeds this, you may use Free File Fillable Forms. The IRS also has a Direct File program, allowing eligible taxpayers to file federal returns directly.

You can submit your return to the IRS either electronically or by mail. Electronic filing is generally the fastest and most accurate method for quicker processing of refunds. Alternatively, you can print and mail your completed paper forms.