Uber Driver Taxes in Maryland - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Maryland?

Yes, income earned as an Uber driver is absolutely taxable, both at the federal and Maryland state levels. The IRS considers you self-employed, not an employee of Uber. 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). Even if you don't feel like you made a profit, you must file Schedule C if your gross income from Uber exceeds $400.

Maryland Specific Rules: Maryland has a graduated income tax system, meaning the tax rate increases as your income increases. You'll use Form 502 to calculate your Maryland state income tax. In addition to the state income tax, Maryland also levies a local (county and/or Baltimore City) income tax. The rate varies depending on where you live. Your Uber net profit from Schedule C will be included in your Maryland adjusted gross income, and then subject to both state and local taxes. You'll need to determine your local tax rate based on your county of residence.

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 the date, starting and ending locations, and business purpose. You can also deduct parking fees and tolls related to your Uber trips.
• 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 method requires meticulous record-keeping and is often more beneficial if your actual expenses are high. You cannot switch between methods year to year.
• Uber App Fees & Software: Any fees you pay to Uber, as well as the cost of any tax preparation software or apps used specifically for managing your Uber income and expenses, are deductible.
• Phone Expenses: If you use your personal phone for Uber-related activities (navigation, accepting rides, etc.), you can deduct the percentage of your phone bill that corresponds to business use. Keep records to support this calculation.

The 15.3% Self-Employment Tax Surprise

Because you're self-employed, you're responsible for paying both the employer and employee portions of Social Security and Medicare taxes. This combined tax is called Self-Employment Tax and totals 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). You'll calculate this on Schedule SE (Self-Employment Tax).

The good news is you get to deduct one-half of your self-employment tax from your adjusted gross income on Form 1040, which can lower your overall tax bill. However, it's important to be prepared for this additional tax liability, as it's often a surprise to new Uber drivers.

Closing Tip for Maryland Residents

Navigating self-employment taxes can be complex. I strongly recommend keeping meticulous records of all your income and expenses throughout the year. Consider using accounting software designed for freelancers or consulting with a qualified tax professional, especially given Maryland’s graduated income tax and local tax structure. Proactive tax planning can help you minimize your tax liability and avoid penalties. Don't hesitate to seek professional guidance to ensure you're taking advantage of all available deductions and complying with all applicable tax laws.