Uber Driver Taxes in Virginia - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Virginia?

Yes, income earned as an Uber driver is absolutely taxable, both at the federal and Virginia state levels. As an independent contractor, you are considered self-employed by both the IRS and the Virginia Department of Taxation. This means you're responsible for reporting all earnings and paying the associated 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 IRS considers Uber driving a business, and you must report it as such.

Virginia Requirements: Virginia has a graduated income tax system, meaning the tax rate increases as your income increases. Your net profit from Schedule C will be included in your Virginia taxable income (reported on Form 505, Virginia Individual Income Tax Return). The specific tax brackets for 2024 income (filed in 2025) will be published by the Virginia Department of Taxation, but your federal adjusted gross income (AGI) is a key component in calculating your Virginia tax liability. You'll need to determine your Virginia tax bracket based on your total income and filing status.

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 cannot use the standard mileage rate if you've previously claimed depreciation on the vehicle.
• 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. Generally, the mileage method yields a larger deduction, but compare both methods to see which benefits you most.
• Uber Fees & Commissions: The fees Uber charges for using their platform are deductible. This is typically shown on your 1099-K form.
• 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 the business percentage.

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%. This is calculated on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on 92.35% of your net earnings. 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.

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

Closing Tip for Virginia Residents

Tax laws can be complex, and it's easy to miss deductions or make errors. Consider using tax software designed for self-employed individuals or consulting with a qualified tax professional, especially given Virginia's graduated income tax system. Accurate record-keeping throughout the year is crucial for maximizing your deductions and ensuring a smooth tax filing process. The Virginia Department of Taxation website (https://www.virginia.gov/taxes/) is a valuable resource for state-specific information.