Uber Driver Taxes in Arkansas - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Arkansas

Navigating the scenic byways and bustling cities of Arkansas as an Uber driver offers flexibility, but also brings unique tax responsibilities. As an independent contractor, earnings from Uber and other gig platforms are considered self-employment income, requiring careful tracking and reporting to both the IRS and the Arkansas Department of Finance and Administration.

The IRS requires Uber drivers to report their income and expenses on Schedule C (Profit or Loss from Business) when filing their federal income tax return. Crucially, income exceeding $400 necessitates the payment of self-employment taxes, covering both Social Security and Medicare contributions, which are not automatically withheld from your earnings by Uber.

How Arkansas Handles Gig Worker Taxes

As a resident of Arkansas, a state income tax return is required, regardless of income level. Arkansas utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Arkansas residents filing as self-employed individuals will primarily use Form AR1040 and Schedule IN (Income) to report their earnings. It's important to note that Arkansas does not offer a specific form tailored solely for gig workers; rather, self-employment income is integrated into the standard individual income tax filing process. Arkansas also allows for itemized deductions, which can potentially lower your taxable income. Keep meticulous records of all income and expenses to accurately calculate your state tax liability. The Arkansas Department of Finance and Administration provides detailed information and resources on their website, including tax forms and instructions. Remember to factor in any estimated tax payments made throughout the year to avoid penalties. Arkansas also has provisions for deducting business expenses, mirroring many of the federal deductions available to self-employed individuals. Consulting with a tax professional familiar with Arkansas tax law is highly recommended to ensure full compliance and maximize potential savings.

Top Tax Deductions for Arkansas Drivers

• Standard Mileage: The most popular and often simplest deduction. For the 2025 tax year, the standard mileage rate is 70 cents per mile. Given Arkansas' relatively stable gas prices, the standard mileage rate is likely to be a beneficial option for most drivers.
• Tolls & Parking: While Arkansas doesn't have extensive toll road systems, any tolls incurred during rides, as well as parking fees directly related to Uber trips, are deductible.
• Phone & Data Plan: You can deduct the percentage of your phone and data plan that is used for business purposes. Keep a log of your mileage and time spent driving to support this deduction.
• Vehicle-Related Costs: Expenses like car washes, phone mounts, dash cams, first-aid kits, and insulated food bags used for deliveries are all deductible business expenses.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses (like gas, oil changes, repairs, and insurance) in the same tax year. Choose the method that yields the larger deduction.

Understanding the 15.3% Self-Employment Tax

This tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. Because Uber does not withhold these taxes from your earnings, it is your responsibility to calculate and pay them, typically through estimated tax payments made quarterly to the IRS. This ensures you don't face penalties at tax time.

Resource: Arkansas Department of Finance and Administration