Uber Driver Taxes in North Carolina - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in North Carolina?

Yes, income earned as an Uber driver is absolutely taxable, both at the federal and North Carolina state levels. As an independent contractor, you're considered self-employed by the IRS and the NC 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). Uber will send you a Form 1099-K detailing your earnings if you meet certain thresholds (generally $20,000 in payments and more than 200 trips). However, you are legally obligated to report all income, even if you don't receive a 1099-K.

North Carolina Specific Rules: North Carolina has a flat income tax rate of 4.5% for the 2024 tax year (filing in 2025). Your net profit from Schedule C will be included in your adjusted gross income (AGI) on your NC state income tax return (Form D-400). The flat tax rate simplifies things – you’ll apply 4.5% to your taxable income, which includes your Uber profits.

Top Tax Write-offs for Uber Drivers

One of the biggest benefits of being an independent contractor is the ability to deduct business expenses, which can significantly reduce your tax liability. Here are some key deductions for Uber drivers in North Carolina:

• 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 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 (standard mileage or actual expenses) and stick with it.
• Uber-Related Fees & Commissions: The fees Uber charges you for using their platform are deductible. This is reported directly on Schedule C.
• 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 that corresponds to business use. Keep records to support this allocation.

The 15.3% Self-Employment Tax Surprise

As 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 combined 15.3%. This is known as self-employment tax.

You'll calculate this on Schedule SE (Self-Employment Tax). The good news is you only pay self-employment tax on 92.35% of your net profit from Schedule C. You also get to deduct one-half of your self-employment tax from your gross income on Form 1040, which helps reduce your overall tax burden. Don't be alarmed when you see this tax – it's a normal part of being self-employed!

Closing Tip for North Carolina 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 designed for freelancers or consulting with a qualified tax professional (like myself!) to ensure you're taking all the deductions you're entitled to and complying with all federal and North Carolina tax laws. Proactive tax planning can save you money and headaches come tax season. Good luck and safe driving!