Uber Driver Taxes in New Jersey - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in New Jersey?

Yes, income earned as an Uber driver is absolutely taxable, both at the federal and New Jersey 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. Schedule C calculates your net profit (income minus expenses). This net profit is then used to calculate your income tax liability. The official 2024 standard mileage rate is 67 cents per mile for business use of your vehicle. You can choose to deduct either actual expenses or the standard mileage rate – generally, the standard mileage rate is simpler and often results in a larger deduction, but you must consistently use one method for the life of the vehicle.

New Jersey Requirements: New Jersey has a graduated income tax system. This means the tax rate you pay increases as your income increases. Your Uber net profit (from Schedule C) will be added to your other income (e.g., from a W-2 job) to determine your total taxable income for New Jersey. New Jersey then applies its graduated tax brackets to calculate your state income tax liability. You'll file this information on New Jersey Form NJ-1040. New Jersey also requires you to pay state income tax on the self-employment tax you pay at the federal level (more on that below).

Top Tax Write-offs for Uber Drivers

As an Uber driver, you can significantly reduce your tax burden by taking advantage of eligible deductions. Here are some key write-offs:

• Mileage: As mentioned, the 2024 standard mileage rate is 67 cents per mile. Keep a detailed log of all business miles driven (from accepting a ride request to dropping off the passenger). Apps like Stride Tax or Everlance can help with this.
• Vehicle Expenses (if not using mileage): If you choose to deduct actual expenses instead of mileage, you can deduct costs like gas, oil changes, repairs, maintenance, insurance, registration fees, and depreciation (or lease payments). You must keep detailed receipts for all these expenses.
• 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 your business use. Keep records of how much time you spend using your phone for Uber-related activities.

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).

The good news is you get to deduct one-half of your self-employment tax from your adjusted gross income on Form 1040. However, New Jersey also requires you to pay state income tax on the amount of self-employment tax you pay at the federal level, so be prepared for that when filing your NJ-1040.

Closing Tip for New Jersey Residents

Navigating taxes as an Uber driver can be complex. I strongly recommend keeping meticulous records of your income and expenses throughout the year. Consider using accounting software or a tax preparation app designed for self-employed individuals. Don't hesitate to consult with a qualified tax professional (like myself!) to ensure you're maximizing your deductions and complying with all federal and New Jersey tax laws. Proper planning can save you significant money and stress during tax season.