Uber Driver Taxes in Tennessee - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Tennessee?

Yes, your income as an Uber driver is taxable, but the situation in Tennessee is simpler than in many other states. The federal government 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. This form calculates your net profit (income minus expenses), which is then subject to income tax.

Tennessee-Specific Rule: Tennessee does not have a state income tax on wages or salaries. This means you won't file a state income tax return based on your Uber earnings. However, the federal income tax and self-employment tax still apply. It's crucial to accurately track your income and expenses for federal purposes.

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 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 also deduct parking fees and tolls related to your Uber trips.
• 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 may only be beneficial if your actual expenses exceed the standard mileage deduction.
• Uber-Related Fees & Commissions: The fees Uber charges you for using their platform are deductible. This includes the percentage Uber takes from each fare.
• 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 attributable to business use. 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 tax on Schedule SE (Self-Employment Tax).

The good news is you only pay self-employment tax on your net earnings (profit) after subtracting your business expenses. Also, you can deduct one-half of your self-employment tax from your gross income on Form 1040, further reducing your overall tax liability.

Closing Tip for Tennessee Residents

While Tennessee offers the benefit of no state income tax, don’t underestimate the importance of accurate federal tax filing as an Uber driver. Maintaining detailed records of your income and expenses throughout the year will save you time and potential headaches during tax season. Consider using accounting software or consulting with a tax professional to ensure you're maximizing your deductions and complying with all applicable tax laws. Good luck, and drive safely!