Uber Driver Taxes in Vermont - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Vermont?

Yes, income earned as an Uber driver is absolutely taxable, both at the federal and Vermont state levels. As an independent contractor, you are considered self-employed by the IRS and the State of Vermont. 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). The official 2024 standard mileage rate is 67 cents per mile for business use of your vehicle. You can choose to deduct either actual expenses (gas, oil, repairs, etc.) or the standard mileage rate – but not both. Generally, the standard mileage rate is simpler and often results in a larger deduction.

Vermont Specific Rules: Vermont has a graduated income tax system. This means the tax rate you pay increases as your income increases. Your Uber income, after deducting business expenses on Schedule C, will be added to your other income (e.g., wages from a separate job) to determine your total taxable income for Vermont. Vermont also requires you to file a Vermont income tax return (Form INC) to calculate your state income tax liability. Vermont generally follows federal adjusted gross income (AGI) as a starting point, but has its own adjustments and deductions.

Top Tax Write-offs for Uber Drivers

• Mileage: As mentioned, the 67 cents per mile (for 2024) is a significant deduction. Keep a detailed log of all business miles driven (from when you log into the Uber app with the intention of accepting a ride, to when you log out after completing rides). Apps like Stride Tax or Everlance can help with this.
• Vehicle Expenses (Alternative to Mileage): If you choose to deduct actual expenses instead of mileage, you can deduct costs like gas, oil changes, repairs, maintenance, insurance, registration fees, and depreciation (or lease payments). You must keep detailed receipts for all these expenses.
• Uber App Fees & Subscriptions: Any fees paid directly to Uber, as well as the cost of any subscription services used specifically for driving (e.g., tax preparation software designed for gig workers, phone data plans used primarily for Uber), are deductible.
• Phone Expenses: You can deduct the portion of your cell phone bill that is directly related to your Uber driving activities. This is typically calculated based on the percentage of time you use your phone for Uber work.

The 15.3% Self-Employment Tax Surprise

Because you're self-employed, you're responsible for paying 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). However, you only pay self-employment tax on 92.35% of your net earnings from Schedule C. The good news is that you can deduct one-half of your self-employment tax from your gross income on Form 1040, which reduces your overall tax liability.

Closing Tip for Vermont Residents

Navigating taxes as an Uber driver can be complex. I strongly recommend keeping meticulous records of all your income and expenses throughout the year. Consider using accounting software or a tax preparation service specializing in self-employment income. Vermont also offers resources for small business owners on the Department of Taxes website (https://tax.vermont.gov/). Proactive planning and accurate record-keeping will help you minimize your tax liability and avoid potential issues with the IRS or the Vermont Department of Taxes.