Uber Driver Taxes in California - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in California?

Yes, absolutely. Income earned as an Uber driver is taxable at both the federal and California state levels. As an independent contractor, Uber doesn't withhold income taxes for you, meaning you're responsible for paying them yourself.

Federal Requirements: You'll report your Uber income on Schedule C (Profit or Loss from Business) as part of your Form 1040. This form calculates your net profit – your gross income from Uber driving minus your business expenses. It's crucial to keep accurate records of both income and expenses.

California Specific Rules: California has a graduated income tax system, meaning the more you earn, the higher the tax rate. This is important because your Uber income will be added to any other income you have, and taxed accordingly. California's rates are among the highest in the nation, so accurate record-keeping and maximizing deductions are particularly important to minimize your tax liability. You'll use Form 540 to file your California state income tax return. California also requires you to report your federal adjusted gross income (AGI) on your state return.

Top Tax Write-offs for Uber Drivers

As an Uber driver, you can significantly reduce your tax burden 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 mile for business use (verify the final IRS figure when filing). You must keep a detailed mileage log documenting dates, destinations, and business purpose. You can choose between the standard mileage rate or actual expenses (gas, oil, repairs, etc.), but not both.
• Vehicle Expenses (if not using standard mileage): If you choose to deduct actual expenses instead of mileage, you can deduct costs like gas, oil changes, repairs, maintenance, insurance, registration fees, and depreciation. Keep all receipts!
• Uber-Related Software & Apps: Expenses for apps used specifically for Uber driving (e.g., tax tracking apps, navigation apps) are deductible.
• Phone Expenses: You can deduct the portion of your cell phone bill that relates to your Uber driving activities. This is typically calculated based on the percentage of time you use your phone for work.

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 – a total of 15.3%. This is calculated on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on profits over $400. The good news is that 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 California Residents

California's tax laws can be complex. Don't hesitate to consult with a qualified tax professional, especially given the state's graduated income tax rates. Accurate record-keeping throughout the year is your best defense against overpaying taxes or facing penalties. Consider using accounting software designed for independent contractors to simplify tracking income and expenses. Proactive tax planning can save you significant money and stress when filing time arrives in 2025!