Uber Driver Taxes in San Francisco, California - 2026

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in San Francisco, California

Navigating the hills and high demand of San Francisco as an Uber driver offers flexibility, but also brings unique tax considerations. As an independent contractor, understanding these obligations is crucial for a smooth tax season.

The IRS requires Uber drivers to report their income on Schedule C (Profit or Loss From Business) as part of their Form 1040. Furthermore, earnings exceeding $400 necessitate the payment of self-employment taxes, covering both Social Security and Medicare contributions, which are not automatically withheld from your earnings by Uber.

How California Handles Gig Worker Taxes

As a resident of California, a state income tax return is required even if your federal tax liability is zero. California’s tax system is graduated, meaning the tax rate increases as your income rises. This means the more you earn driving for Uber in San Francisco, the higher percentage of your income will be taxed. The primary form for self-employed individuals to report income and calculate tax liability is Form 540. California also has specific rules regarding deductions and credits that can impact your overall tax burden. Given the higher cost of living and frequent traffic congestion in San Francisco, drivers may accumulate significant expenses related to vehicle maintenance and parking. These expenses, if properly documented, can significantly reduce taxable income. Be aware of potential city-specific regulations regarding business licenses or permits for ride-sharing drivers operating within San Francisco city limits. California’s Franchise Tax Board (FTB) provides detailed information and resources for self-employed individuals; you can find more information at the California Franchise Tax Board website. It's important to note that California does not conform to all federal tax deductions, so careful review of state-specific guidelines is essential. Quarterly estimated tax payments are often required to avoid penalties, especially if your income is substantial. The FTB offers online tools to help calculate and pay estimated taxes.

Top Tax Deductions for San Francisco, 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 the Bay Area, including San Francisco, carefully consider whether the standard mileage rate or the actual expenses method will yield a greater tax benefit.
• Tolls & Parking: San Francisco drivers frequently encounter tolls on bridges like the Golden Gate and Bay Bridge (using FasTrak) and often face expensive parking fees while waiting for ride requests. These are deductible business expenses.
• Phone & Data Plan: You can deduct the percentage of your phone and data plan attributable to business use. Keep a log of the time spent using your phone for Uber-related activities.
• Vehicle-Related Costs: Expenses like car washes (to maintain a professional appearance for passengers), phone mounts, dash cams, and insulated food bags for Uber Eats deliveries are all 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 deduction.

Understanding the 15.3% Self-Employment Tax

This tax covers both Social Security and Medicare taxes. Unlike traditional employment, Uber and other platforms do not withhold these taxes from your earnings. Therefore, it’s your responsibility to calculate and pay this tax, typically through quarterly estimated tax payments to the IRS.