Uber Driver Taxes in Alaska - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Alaska?

Yes, your income as an Uber driver is taxable, but the situation in Alaska is unique. While Alaska has no state income tax, you are still responsible for federal income tax and self-employment tax on your earnings. The IRS considers you self-employed, meaning you operate as a business. You'll report your Uber income and expenses on Schedule C (Profit or Loss From Business), which is filed with your Form 1040.

Because Alaska doesn't have a state income tax, you won't file a state income tax return. However, you must accurately report your federal income and self-employment taxes.

Top Tax Write-offs for Uber Drivers

As a self-employed Uber driver, you can significantly reduce your tax liability by claiming eligible business expenses. Here are some key deductions:

• Mileage: This is often the largest deduction. For 2024, the standard mileage rate is 67 cents per business mile driven. Keep a detailed log of all miles driven for Uber, including dates, starting/ending locations, and purpose. You can also deduct parking fees and tolls.
• Vehicle Expenses (Alternative to Mileage): Instead of the standard mileage rate, you can deduct the actual expenses of operating your vehicle, such as gas, oil changes, repairs, insurance, registration fees, and depreciation. You must choose one method (standard mileage or actual expenses) and be consistent.
• Uber-Related Software & Apps: Expenses for apps or software used specifically for Uber driving (e.g., tax tracking apps, GPS navigation) are deductible.
• Phone Expenses: You can deduct the portion of your cell phone bill that is directly related to your Uber driving activities. Keep records of business use.

The 15.3% Self-Employment Tax Surprise

Many Uber drivers are surprised to learn about self-employment tax. When you're an employee, your employer pays half of your Social Security and Medicare taxes. As a self-employed individual, you're responsible for both the employer and employee portions, totaling 15.3%. This is calculated on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on your profit (income minus expenses). Also, you don't pay self-employment tax on any earnings below $400. You do get to deduct one-half of your self-employment tax from your gross income on Form 1040.

Closing Tip for Alaska Residents

While the lack of state income tax in Alaska is a benefit, it's crucial to be diligent about tracking your income and expenses throughout the year. Consider using accounting software or a dedicated spreadsheet to maintain accurate records. Paying estimated taxes quarterly can help you avoid penalties at tax time. Consulting with a qualified tax professional, especially one familiar with self-employment taxes, is always a wise investment. Good luck, and safe driving!