Uber Driver Taxes in South Dakota - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in South Dakota?

Yes, your income as an Uber driver is taxable, but the situation in South Dakota is simpler than in most states. While South Dakota doesn't have a state income tax, you are still responsible for federal income and self-employment taxes. The IRS considers you self-employed, meaning you operate as a business. You'll report your Uber income and expenses on Schedule C (Profit or Loss From Business), which is filed with your Form 1040.

South Dakota Specifics: Because South Dakota has no state income tax, you won't file a state income tax return. However, your federal obligations remain the same. You are still required to accurately report all income and eligible deductions to the IRS.

Top Tax Write-offs for Uber Drivers

• Mileage: This is often the biggest deduction! For 2024, the standard mileage rate is 67 cents per business mile driven. Keep a detailed log (date, starting/ending location, business purpose, and miles driven). You can use apps to help track this.
• Vehicle Expenses (Alternative to Mileage): Instead of mileage, you can deduct the actual expenses of operating your vehicle (gas, oil, repairs, insurance, registration, depreciation). This requires more detailed record-keeping. Generally, mileage is more beneficial.
• Uber-Related Fees & Commissions: The fees Uber charges you (the percentage they take from each fare) are deductible. Keep records of these fees, usually found in your Uber driver statements.
• Phone & Data Expenses: You can deduct the portion of your cell phone bill and data plan that you use for Uber driving. If you use your phone solely for Uber, you can deduct the entire amount. Otherwise, you need to calculate the business use percentage.

The 15.3% Self-Employment Tax Surprise

As a self-employed individual, 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).

Good news: you only pay self-employment tax on your profit (income minus expenses). Also, you can deduct one-half of your self-employment tax from your gross income on Form 1040, which reduces your overall tax liability.

Remember, self-employment tax applies to earnings over $400.

Closing Tip for South Dakota Residents

Being an Uber driver in South Dakota offers the benefit of no state income tax, but diligent record-keeping is crucial for maximizing your federal deductions and accurately calculating your self-employment tax. Consider using accounting software or consulting with a tax professional to ensure you're compliant and taking advantage of all available tax benefits. Don't wait until the last minute – start organizing your records now for a smoother tax filing experience in 2025!