Uber Driver Taxes in Los Angeles, California - 2026

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Los Angeles, California

Navigating the bustling streets of Los Angeles as an Uber driver offers flexibility, but also brings unique tax responsibilities. As an independent contractor, earnings from driving are considered self-employment income, requiring careful tracking and reporting to both the IRS and the California Franchise Tax Board (FTB).

The IRS requires all Uber drivers to report their income and expenses on Schedule C (Profit or Loss from Business) when filing their federal income tax return (Form 1040). Furthermore, because you are self-employed, you are responsible for paying self-employment taxes, which cover both Social Security and Medicare. This is in addition to your regular income tax liability.

How California Handles Gig Worker Taxes

As a resident of California, a state income tax return is required even if no federal tax is owed. California has a graduated income tax system, meaning the tax rate increases as your income rises. This means your tax bracket, and therefore your tax rate, will depend on your total taxable income for the year. The primary form for self-employed individuals to report income and calculate tax liability is Form 540. California also requires you to pay estimated taxes quarterly if you expect to owe $1,000 or more in taxes for the year. This is crucial to avoid penalties. Driving in a high-demand area like Los Angeles, especially during events at the Staples Center (Crypto.com Arena) or around LAX, can lead to significant earnings, potentially pushing you into higher tax brackets. Be mindful of potential city-specific business licenses or regulations that may apply to rideshare drivers operating within Los Angeles city limits. California also has a minimum franchise tax, even if you have no income. It's important to stay updated on any changes to California's tax laws affecting independent contractors, as the state frequently adjusts its regulations regarding the gig economy. The FTB provides detailed information and resources for self-employed individuals on their website: California Franchise Tax Board.

Top Tax Deductions for Los Angeles, California Drivers

• Standard Mileage: The #1 deduction for most drivers. The 2025 rate is 70 cents per mile. Given the consistently high gas prices in California, particularly in Los Angeles, carefully consider whether the standard mileage rate or the actual expenses method will yield a larger deduction.
• Tolls & Parking: Los Angeles drivers frequently encounter tolls on certain freeways and significant parking costs while waiting for ride requests, especially near popular destinations like Hollywood or Santa Monica. These are deductible business expenses.
• Phone & Data Plan: The portion of your monthly phone and data plan used for Uber driving (e.g., navigation, driver app) is deductible. Keep detailed records of business usage.
• Vehicle-Related Costs: Expenses like car washes to maintain a professional appearance, phone mounts, dash cams, and insulated food bags for deliveries are all potentially deductible.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses like gas or repairs in the same year. Choose the method that results in the largest overall deduction.

Understanding the 15.3% Self-Employment Tax

This tax covers both Social Security and Medicare taxes. Unlike traditional employment where your employer withholds these taxes, as an Uber driver, you are responsible for paying both the employer and employee portions, totaling 15.3% on net earnings over $400. This is a significant tax liability, so proper planning and estimated tax payments are essential.