Uber Driver Taxes in Arkansas - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Arkansas?

Yes, income earned as an Uber driver is absolutely taxable, both at the federal and Arkansas state levels. As an independent contractor, you are considered self-employed by the IRS and the Arkansas Department of Finance and Administration. This means you're responsible for reporting your earnings and paying all applicable taxes.

Federal Requirements: You'll report your Uber income and expenses on Schedule C (Profit or Loss From Business), which is filed with your Form 1040. This form calculates your net profit (income minus expenses). The official 2024 standard mileage rate for business use is 67 cents per mile. You can choose to deduct either actual expenses or the standard mileage rate – generally, the standard mileage rate is simpler and often results in a larger deduction, especially if you have significant vehicle expenses.

Arkansas Specific Rules: Arkansas has a graduated income tax system. This means the tax rate you pay increases as your taxable income increases. Your net profit from Schedule C will be added to your other income (like wages from a traditional job, if any) to determine your total taxable income for Arkansas. You'll then use the Arkansas income tax brackets to calculate your state income tax liability. Arkansas also has a standard deduction and itemized deduction options, similar to the federal system, which can reduce your taxable income.

Top Tax Write-offs for Uber Drivers

Maximizing your deductions is key to minimizing your tax bill. Here are some common deductions for Arkansas Uber drivers:

• Mileage: As mentioned, you can deduct 67 cents per mile driven for business purposes (2024 rate). Keep a detailed mileage log! Apps like Stride or Everlance can help.
• Vehicle Expenses (Alternative to Mileage): If you choose not to use the standard mileage rate, you can deduct actual vehicle expenses like gas, oil changes, repairs, insurance, registration fees, and depreciation. You must keep detailed records of these expenses.
• Uber-Related Fees & Commissions: The fees Uber charges you (the percentage they take from each fare) are deductible.
• Smartphone & Data Plan: If you use your smartphone primarily for Uber driving, you can deduct the portion of your phone bill and data plan that relates to your business use.

The 15.3% Self-Employment Tax Surprise

Many Uber drivers are surprised by 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 – a total of 15.3%. This is calculated on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on 92.35% of your net earnings. The good news is you can deduct one-half of your self-employment tax from your gross income on Form 1040, which reduces your overall tax liability.

Closing Tip for Arkansas Residents

Tax laws can be complex, and this information is for general guidance only. I strongly recommend keeping meticulous records of all your income and expenses throughout the year. Consider using accounting software designed for self-employed individuals. Finally, consulting with a qualified tax professional in Arkansas, like myself, can ensure you're taking advantage of all available deductions and complying with all applicable tax laws. Don't hesitate to reach out for personalized advice – accurate tax preparation can save you money and prevent potential issues with the IRS and the Arkansas Department of Finance and Administration.