Uber Driver Taxes in Hawaii - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Hawaii?

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

Federal Taxes: You'll report your Uber income and expenses on Schedule C (Profit or Loss From Business), which is filed with your Form 1040. Schedule C allows you to deduct business expenses, reducing your taxable income. The net profit (income minus expenses) from Schedule C is then reported on your Form 1040.

Hawaii State Taxes: Hawaii has a graduated income tax system. This means the tax rate you pay increases as your income increases. Your Uber income, after federal adjustments and deductions, will be subject to Hawaii state income tax based on your total taxable income for the year. You'll use Hawaii Form N-11 to file your state income tax return. Hawaii also conforms to many federal deductions, but it's crucial to check for any differences.

Top Tax Write-offs for Uber Drivers

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

• Mileage: This is often the biggest 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 the date, starting and ending locations, and business 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. This requires meticulous record-keeping and is often more beneficial if your vehicle-related expenses are high.
• Uber-Related Software & Apps: Expenses for apps or software used specifically for Uber driving (e.g., tax tracking apps, route optimization tools) are deductible.
• Phone Expenses: If you use your personal phone for Uber driving, you can deduct the percentage of the phone bill attributable to business use. Keep records of your business calls and data usage.

The 15.3% Self-Employment Tax Surprise

As an employee, your employer pays half of your Social Security and Medicare taxes. As a self-employed individual, you're responsible for both halves. This is known as self-employment tax. It's currently 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). You report this on Schedule SE (Self-Employment Tax). The good news is that you can deduct one-half of your self-employment tax from your adjusted gross income on Form 1040, which helps reduce your overall tax burden. This tax applies to earnings over $400.

Closing Tip for Hawaii Residents

Navigating taxes as an Uber driver can be complex, especially with Hawaii’s state income tax requirements. I strongly recommend keeping meticulous records of all income and expenses throughout the year. Consider using accounting software designed for self-employed individuals. Don't hesitate to consult with a qualified tax professional in Hawaii – like myself – to ensure you're taking all eligible deductions and complying with all applicable tax laws. Mahalo, and have a safe and profitable year driving!