Uber Driver Taxes in Michigan - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Michigan?

Yes, income earned as an Uber driver is absolutely taxable, both at the federal and Michigan state levels. As an independent contractor, you are considered self-employed by the IRS and the State of Michigan. 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) when you file your federal income tax return (Form 1040). Schedule C calculates your net profit (income minus expenses), which is then added to your adjusted gross income. The official 2024 standard mileage rate is 67 cents per mile. Keep meticulous records of your mileage!

Michigan Specific Rules: Michigan has a flat income tax rate of 4.05% for 2024. Your net profit from Schedule C will be included in your Michigan income tax calculation. You'll file this information using Michigan Form MI-1040. Because Michigan has a flat tax, there are no income brackets to worry about – the same rate applies to all levels of taxable 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. You can deduct 67 cents per mile driven for business purposes (2024 rate). Alternatively, you can deduct actual expenses (gas, oil, repairs, insurance, depreciation), but you generally can't use both methods. Keep a detailed mileage log!
• Vehicle Expenses (if not using mileage rate): If you choose to deduct actual expenses, you can include costs like gas, oil changes, repairs, maintenance, tires, insurance, vehicle registration fees, and depreciation.
• Uber-Related Fees & Software: Any fees paid to Uber, as well as the cost of apps or software used specifically for driving (e.g., GPS navigation, driver tracking apps) are deductible.
• Phone Expenses: You can deduct the portion of your cell phone bill that is directly related 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 adjusted gross income on Form 1040, which helps reduce your overall tax burden.

Closing Tip for Michigan Residents

Tax laws can be complex, and it's easy to miss deductions or make errors. I strongly recommend keeping excellent records of all your income and expenses throughout the year. Consider using accounting software designed for self-employed individuals. If you're unsure about any aspect of your tax situation, consulting with a qualified tax professional (like myself!) can save you money and headaches in the long run. Wishing you a safe and profitable driving year in Michigan!