Uber Driver Taxes in Massachusetts - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Massachusetts?

Yes, income earned as an Uber driver is absolutely taxable, both at the federal and Massachusetts state levels. As an independent contractor, you are considered self-employed by both the IRS and the Massachusetts Department of Revenue (DOR). This means you're responsible for reporting your earnings and paying all applicable 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. This form calculates your net profit (income minus expenses). The IRS considers Uber driving a business, and you must report all income received, even if you don't receive a 1099-K form (though you likely will if you earn over $20,000 and have over 200 rides).

Massachusetts Taxes: Massachusetts has a flat income tax rate of 5.0% for 2024. Your net profit from Schedule C will be added to your other income, and this total taxable income will be subject to the 5.0% rate. Massachusetts also requires you to file a state income tax return (Form 1) to report this income.

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 purpose (e.g., "Uber ride - passenger pickup"). You can use apps to track this automatically.
• 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 complex than using the standard mileage rate. You generally need to choose one method (mileage or actual expenses) and stick with it.
• Uber-Related Fees & Commissions: The fees Uber charges for using their platform are deductible. This includes the percentage Uber takes from each fare.
• 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. For example, if you use your phone 60% of the time for Uber, you can deduct 60% of the cost.

The 15.3% Self-Employment Tax Surprise

Being self-employed means you're both the employee and the employer. This means you're responsible for paying both the employee and employer portions of Social Security and Medicare taxes. This combined tax is called Self-Employment Tax and is currently 15.3% (12.4% for Social Security and 2.9% for Medicare).

You'll calculate this on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on 92.35% of your net earnings from Schedule C. 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 income tax liability.

Remember, self-employment tax applies to earnings over $400.

Closing Tip for Massachusetts Residents

Tax laws can be complex, and it's easy to miss deductions or make errors. Consider using tax software designed for self-employed individuals or consulting with a qualified tax professional, especially in Massachusetts where state tax rules can be nuanced. Keeping accurate records throughout the year – mileage logs, receipts for expenses, and income statements from Uber – will make filing your taxes much smoother and ensure you're paying the correct amount. Don't wait until the last minute!