Uber Driver Taxes in Rhode Island - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Rhode Island?

Yes, income earned as an Uber driver is absolutely taxable, both at the federal and Rhode Island 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: Schedule C – 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). This form calculates your net profit (income minus expenses), which is then added to your other income to determine your adjusted gross income (AGI). Your net profit is also subject to self-employment tax (explained below).

Rhode Island Specific Rules: Graduated Income Tax – Rhode Island 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 RI-1040 to calculate your Rhode Island income tax liability. Rhode Island also allows for itemized deductions, which may further reduce your taxable income, but the standard deduction is often more beneficial.

Top Tax Write-offs for Uber Drivers

As a self-employed Uber driver, you can significantly reduce your tax burden 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 can’t use mileage if you’ve already claimed depreciation on the vehicle.
• Vehicle Expenses (Alternative to Mileage): Instead of mileage, you can deduct the actual expenses of operating your vehicle, such as gas, oil changes, repairs, insurance, registration fees, and depreciation. You must choose one method (mileage or actual expenses) and be consistent.
• Uber Fees & Commissions: The fees Uber charges you for using their platform are deductible. This is reported directly on Schedule C.
• 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 business use. Keep records to support this allocation.

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%.

Schedule SE (Self-Employment Tax) – You’ll calculate this tax on Schedule SE. The good news is you only pay self-employment tax on 92.35% of your net profit. You also get to deduct one-half of your self-employment tax from your gross income on Form 1040, which reduces your overall tax liability. The threshold for self-employment tax applies if your net earnings from self-employment are $400 or more.

Closing Tip for Rhode Island 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 both federal and Rhode Island tax laws. Don't wait until the last minute – proactive tax planning can save you money and stress. Good luck and safe driving!