Uber Driver Taxes in Kentucky - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Kentucky?

Yes, income earned as an Uber driver is absolutely taxable, both at the federal and Kentucky state levels. As an independent contractor, you are considered self-employed by the IRS and the Kentucky Department of Revenue. 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). It's crucial to keep accurate records of both your income from Uber and all related business expenses.

Kentucky Specific Rules: Kentucky has a flat income tax rate of 4.0% for 2024. Your net profit from Schedule C will be included in your adjusted gross income (AGI) on your Kentucky income tax return (Form 740). You'll then calculate your Kentucky income tax liability based on this AGI and the 4.0% rate. Kentucky also requires you to pay estimated taxes quarterly if you expect to owe $500 or more in state income tax for the year.

Top Tax Write-offs for Uber Drivers

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

• Mileage: This is often the largest deduction! For 2024, the standard mileage rate is 67 cents per mile for business use. You must keep a detailed mileage log documenting the date, purpose (Uber trip), and miles driven. You can not claim mileage if you use the actual expense method (see below).
• Vehicle Expenses (Actual Expense Method): Instead of mileage, you can deduct the actual costs of operating your vehicle, such as gas, oil changes, repairs, insurance, registration fees, and depreciation. You'll need to keep detailed receipts for all expenses. You cannot switch between the mileage and actual expense methods year to year.
• Uber Fees & Commissions: The fees Uber charges you for using their platform are deductible. This is typically shown on your Uber earnings summary.
• 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 business use. Keep records to support this allocation.

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%.

You'll calculate this tax on Schedule SE (Self-Employment Tax). The good news is you only pay self-employment tax on 92.35% of your net earnings from Schedule C. However, you do need to pay this tax if your net earnings are $400 or more. Half of your self-employment tax is deductible from your gross income on Form 1040.

Closing Tip for Kentucky Residents

Navigating taxes as an Uber driver can be complex. I strongly recommend keeping meticulous records of all income and expenses throughout the year. Consider using accounting software or a spreadsheet to track everything. Don't hesitate to consult with a qualified tax professional, like myself, to ensure you're taking all eligible deductions and complying with both federal and Kentucky tax laws. Proactive tax planning can save you money and avoid potential penalties. Good luck and safe driving!