Uber Driver Taxes in Montana - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Montana?

Yes, income earned as an Uber driver is absolutely taxable, both at the federal and Montana state levels. As an independent contractor, you are considered self-employed by the IRS and the Montana 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). The net profit is then added to your other income when calculating your Adjusted Gross Income (AGI).

Montana Specific Rules: Montana has a graduated income tax system. This means the tax rate you pay increases as your income increases. Your Uber net profit, added to your other income sources, will be taxed according to these brackets. You'll use Form 2 (Montana Individual Income Tax Return) to calculate your Montana income tax liability. Montana also has standard deductions and exemptions, which can reduce your taxable income. You can find the current tax brackets and forms on the Montana Department of Revenue website: https://revenue.mt.gov/

Top Tax Write-offs for Uber Drivers

As an 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 cannot claim mileage for commuting to/from your personal home.
• 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.
• Uber-Related Fees & Commissions: The fees Uber charges you for using their platform are deductible. Keep records of all fees deducted from your earnings.
• Phone & Data Expenses: If you use your phone for Uber-related activities (navigation, accepting rides, communication), you can deduct the portion of your phone bill attributable to business use. Keep records demonstrating business use.

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 is currently 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), which is filed with your Form 1040. 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 gross income.

Closing Tip for Montana 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. For personalized advice tailored to your specific situation, consulting with a qualified tax professional in Montana is always a wise investment. The Montana Department of Revenue website (https://revenue.mt.gov/) is also a valuable resource.