Uber and Lyft Driver Taxes: Mileage, Deductions and Quarterly Payments

Rideshare drivers are independent contractors, not employees. The platform does not withhold taxes from your earnings, so you are responsible for income tax and self-employment tax. The good news is that driving comes with large deductions, mostly for the car.

How your income is reported

You may receive a 1099-K for payments the platform processed, a 1099-NEC for certain other payments such as referral bonuses, or neither if you fall below reporting thresholds. Whatever forms arrive, all your earnings are taxable. You report them on Schedule C, and the platform's annual tax summary helps you see fares, tips and fees.

Choose a car deduction method

You can deduct vehicle costs in one of two ways:

Method	How it works	Best for
Standard mileage rate	A set amount per business mile; the IRS sets the rate yearly (70 cents per mile for 2025)	Fuel-efficient, lower-cost cars and simple records
Actual expenses	The business share of gas, repairs, insurance, registration, depreciation and similar costs	High-cost vehicles or high repair and fuel costs

If you want the option to use the standard mileage rate for a car, you generally need to use it in the first year the car is used for business. Starting with the actual-expense method can lock you out of it later, so decide with care.

What miles count

Miles driven while you are logged into the app and available for rides, plus driving to pick up and drop off passengers, generally count as business miles. The drive from home to your first stop is often treated as commuting and may not qualify, unless your home is your principal place of business. Keep a daily log, using a mileage app or a notebook, with the date, purpose and miles.

Example: 20,000 business miles at 70 cents is $14,000 of deductions, which can erase a large share of your net profit.

Other deductible expenses

Platform commissions and service fees.
Tolls and parking during rides.
Phone and data plan, based on business use.
Phone mounts, chargers and dash cameras.
Car washes, cleaning supplies and passenger water or snacks.
Rideshare-specific insurance, if you buy it.
With the actual-expense method: gas, repairs, tires, oil and depreciation.

You cannot deduct both the standard mileage rate and actual costs such as gas for the same car.

Estimate your tax

Self-employment tax is about 15.3% of 92.35% of your net profit. Add income tax on top. For example, $40,000 of revenue less $14,000 of mileage and $3,000 of other costs leaves $23,000 of net profit. Self-employment tax is about $3,250 plus income tax on the rest. A sensible set-aside is 20% to 25% of net profit.

Pay quarterly

Because nothing is withheld, make estimated tax payments on April 15, June 15, September 15 and January 15. Missing them can lead to penalties. If you also have a W-2 job, you can sometimes cover your tax by increasing withholding instead.

Tips and bonuses

Tips, incentives and referral bonuses are all income. New federal rules for certain years may offer a deduction for qualified tips in some occupations, but they come with limits and conditions, so check current IRS guidance before relying on them.

Keep records

Save your platform tax summaries, weekly earnings statements, receipts, mileage logs and insurance paperwork. A separate bank account for driving makes everything easier.

Common mistakes

Not tracking miles and relying on an end-of-year guess.
Reporting only the income on the 1099.
Skipping quarterly payments and facing a large bill in April.
Deducting both mileage and actual car costs.

Frequently asked questions

Do I have to file if I earned less than $400?

You may not owe self-employment tax, but you still report the income, and filing may be required based on your total income.

Can I deduct my car payment?

Not directly. With the actual-expense method, you can deduct depreciation and interest on the business share, and the standard rate already includes the cost of ownership.