Uber Driver Taxes in Texas - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Texas?

Yes, your income as an Uber driver is taxable, but the situation in Texas 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.

Texas-Specific Rule: Texas has no state income tax. This means you won't file a state income tax return based on your Uber earnings. However, you are still responsible for federal income and self-employment taxes.

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 is often more beneficial if your actual expenses are high. You cannot use both methods in the same year.
• Uber 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 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 on Schedule SE (Self-Employment Tax).

Good news: you only pay self-employment tax on your net profit (after deducting 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.

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

Closing Tip for Texas Residents

Being a Texas resident offers the benefit of no state income tax, but don't let that lead to overlooking your federal tax obligations. Meticulous record-keeping throughout the year – especially mileage logs and expense receipts – is crucial for maximizing your deductions and minimizing your tax bill. Consider using accounting software designed for self-employed individuals or consulting with a qualified tax professional to ensure you're taking advantage of all available tax benefits.