Uber Driver Taxes in Washington - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Uber Driver income taxable in Washington?

Yes, your income as an Uber driver is taxable, but the specifics differ between federal and Washington state. At the federal level, the IRS considers you self-employed. This means you'll report your earnings and expenses on Schedule C (Profit or Loss from Business), which is filed with your Form 1040. You'll calculate your net profit (income minus expenses) on Schedule C, and that net profit is then added to your overall income for federal tax purposes.

Washington State is unique – it does not have a state income tax. However, this doesn't mean you avoid all taxes. Washington does have a capital gains tax on profits from the sale or exchange of certain assets. While typical Uber driving income isn't usually considered a capital gain, it's important to be aware of this if you sell a vehicle used for Uber driving at a profit. You will still be responsible for federal income and self-employment taxes, even as a Washington resident.

Top Tax Write-offs for Uber Drivers

As an Uber driver, you can significantly reduce your tax liability by taking advantage of various deductions. Here are some key write-offs:

• Mileage: This is often the biggest 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.
• 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. You must choose one method (mileage or actual expenses) and be consistent.
• Uber App Fees & Software: The fees you pay to Uber, as well as any subscription costs for tax preparation software or apps used to track your driving, are deductible business expenses.
• Phone 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). The good news is you get to deduct one-half of your self-employment tax from your adjusted gross income on Form 1040. However, it's important to be prepared for this tax, as it's in addition to your regular income tax.

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

Closing Tip for Washington Residents

While Washington State doesn't have an income tax, diligent record-keeping is still crucial for maximizing your federal deductions and accurately calculating your self-employment tax. Consider using accounting software or working with a tax professional to ensure you're taking advantage of all available tax benefits. Don't hesitate to consult the IRS website (https://www.irs.gov/) for the most up-to-date information and resources. Good luck, and drive safely!