Uber Rideshare Driver Accounting & Tax Services

Uber drivers must take a few steps to report their income taxes. First, you'll determine your classification. You're likely an independent contractor for tax purposes. Then, you'll organize paperwork, including any 1099 forms Uber sends, and identify eligible tax deductions to reduce your taxable income. Finally, you'll prepare and file your Uber taxes using IRS Form 1040, U.S. Individual Income Tax Return and attach any supporting documentation by the deadline.

There are numerous expenses that rideshare and Uber drivers can claim as tax deductions, which reduce their tax liability by reducing their taxable income. Transportation costs, a business mobile phone, and car cleaning services are some of the top deductions you should consider claiming. When 1-800Accountant handles your accounting work, your designated team ensures you claim every eligible tax deduction related to your rideshare work.

Unlike accounting generalists who might miss important tax-saving opportunities, accountants specializing in your field are best positioned to address the distinct accounting needs of your rideshare work, ensuring compliance and minimal tax liability. These specialists are typically experienced in overcoming state and regional tax challenges drivers may encounter, which is another invaluable advantage over generalists.

Since Uber and other rideshare drivers represent independent contractors, Uber and other platforms do not withhold income taxes on driver payouts. Because the IRS requires self-employed taxpayers to remit income tax throughout the year, not just at return time, you must submit quarterly estimated tax payments. Use Form 1040-ES, Estimated Tax for Individuals, to estimate your income for the entire year and determine your quarterly tax liability. The form instructions include an estimated tax worksheet for self-employed business owners.

1-800Accountant supports our clients with mileage tracking via our mobile application for your cell phone, which is available for leading phone platforms. Our mileage tracking function makes it easy to record mileage accurately, which is essential for tax deduction purposes. The 2025 standard mileage rate is 70 cents per mile.

Forming your business as a limited liability company (LLC) can benefit Uber and other rideshare drivers. LLC owners enjoy simplicity and flexibility in their tax filing and the protection of their personal assets, shielding them from business liabilities. If you're ready to form your business as an LLC, 1-800Accountant's entity formation service can help. Pricing starts at $0 plus state fees.

If you drive for multiple rideshare platforms, including Uber and Lyft, handling accounting duties is similar to your responsibilities if you drove for a single platform. Many independent contractors will have several sources of income, and it's their responsibility to ensure all materials (Form 1099-K, Form 1099-NEC, mileage log, etc.) are collected and reported for tax purposes, including the reporting of eligible income from Uber and Lyft.

There are state and local taxes you may be responsible for if you drive in multiple states as part of your Uber work. Understanding potential tax responsibilities before entering a new market is optimal, as state and local rules can vary widely. Tolls, which can be deducted, will increase the cost of interstate travel.

The standard mileage rate method allows you to claim a tax deduction for the number of business miles driven during the year. The 2025 rate is 70 cents per mile. The actual expense method allows you to deduct the vehicle’s business-related operating costs. Eligible business expenses include repairs, maintenance, gas, insurance, lease payments, and registration fees. Generally, it's easier to use the standard mileage deduction, which people who drive often for work will use. People who drive less may benefit more from the actual expense method.

Uber drivers and other independent contractors who drive for a living generally report rideshare earnings as self-employment income. As a rideshare driver, use Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship), to report your independent contractor activities. Schedule C reflects your Uber driving income and expenses. The schedule calculates your net income from self-employment. You will also be responsible for paying a 15.3% self-employment tax.

The optimal business structure to file taxes as will depend on many factors, which your accounting team will advise you on. However, our CPAs typically recommend forming an LLC due to its numerous advantages for small business entrepreneurs. LLC owners enjoy simplicity and flexibility in their tax filing and the protection of their personal assets, shielding them from business liabilities that sole proprietorship cannot.

1-800Accountant supports your Uber rideshare activities with earning report integrations via our proprietary bookkeeping platform, ClientBooks. Our platform is compatible with leading bookkeeping software, including QuickBooks Online (QBO), FreshBooks, and Wave. Our bookkeepers are fluent in these platforms, ensuring seamless integration and financial data management.