Uber Driver Taxes in New Mexico - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in New Mexico?

Yes, income earned as an Uber driver is absolutely taxable, both at the federal and New Mexico 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.

New Mexico Requirements: New Mexico has a graduated income tax system, meaning the tax rate increases as your income increases. Your Uber net profit (from Schedule C) will be added to your other income, and then taxed according to the New Mexico tax brackets for the 2024 tax year (filing in 2025). You'll use Form R-1100 to file your New Mexico income tax return. New Mexico also requires you to pay income tax on any federal self-employment tax you paid (more on that below).

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 mile for business use. Keep a detailed log of all miles driven for Uber (from app pickup to dropoff). You can also deduct parking fees and tolls. You cannot deduct commuting miles (driving from your home to your first pickup).
• 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 more detailed record-keeping, and generally only makes sense if your actual expenses are higher than what the mileage rate would provide.
• Uber App Fees & Subscriptions: Any fees you pay to Uber, as well as the cost of any subscription services you use specifically for driving (e.g., tax preparation software designed for gig workers, phone data plans used primarily for Uber), are deductible.
• Phone Expenses: You can deduct the portion of your cell phone bill that is directly related to your Uber driving. If you use your phone for both personal and business purposes, you can only deduct the business percentage. Keep records to support this allocation.

The 15.3% Self-Employment Tax Surprise

Because you're self-employed, you're responsible for 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). You only pay self-employment tax on your net earnings after subtracting your business expenses (from Schedule C). Don't be alarmed when you see this amount – it's a normal part of being self-employed. The good news is half of your self-employment tax is deductible from your gross income on Form 1040.

Closing Tip for New Mexico 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 or a dedicated spreadsheet to track everything. Also, remember that New Mexico requires you to report your federal self-employment tax on your state return. Don't hesitate to consult with a qualified tax professional in New Mexico for personalized advice tailored to your specific situation. Proper planning and accurate record-keeping will help you minimize your tax liability and avoid potential issues with the IRS or the New Mexico Taxation and Revenue Department.