Uber Driver Taxes in California - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in California

Navigating the Golden State’s roads as an Uber driver offers flexibility, but also brings unique tax responsibilities. As an independent contractor, understanding these obligations is crucial for avoiding penalties and maximizing potential savings.

The IRS requires Uber drivers to report their income on Schedule C (Profit or Loss From Business) with Form 1040. 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 California Handles Gig Worker Taxes

As a resident of California, filing a state income tax return is mandatory, even if your federal tax liability is zero. California employs a graduated income tax system, meaning the tax rate increases as your income rises. This means the more you earn, the higher percentage of your income will be taxed. For self-employed individuals, the primary state income tax form is Form 540. California also has specific rules regarding the treatment of independent contractor income. The Franchise Tax Board (FTB) actively monitors gig economy earnings, and accurate reporting is essential. California requires you to pay estimated taxes quarterly if you expect to owe $1,000 or more in state income tax. Failing to do so can result in penalties. Furthermore, California’s high cost of living, particularly regarding vehicle expenses, means carefully considering the standard mileage rate versus actual expense method is vital. The FTB provides resources and guidance specifically for self-employed individuals, including information on deductions and estimated tax payments. Keep meticulous records of all income and expenses, as the FTB may request documentation to support your claims. California also offers various tax credits and deductions that may be applicable to Uber drivers, so exploring these options is recommended.

You can find more information and resources on the California Franchise Tax Board website: https://www.ftb.ca.gov/

Top Tax Deductions for California Drivers

• Standard Mileage: The most popular deduction for Uber drivers. For the 2025 tax year, the rate is 70 cents per mile. Given California’s consistently high gas prices, carefully evaluate if the standard mileage rate provides a greater benefit than tracking actual expenses.
• Tolls & Parking: California drivers frequently encounter tolls, particularly around major metropolitan areas like Los Angeles and the Bay Area, utilizing systems like Fastrak. These tolls, along with parking fees incurred while actively driving for Uber, are deductible.
• Phone & Data Plan: The portion of your monthly phone and data bill directly related to your Uber driving activities is deductible. Keep a log of business usage to justify the deduction.
• Vehicle-Related Costs: Expenses like car washes, phone mounts, dash cams, first-aid kits, and insulated food bags used for deliveries are deductible as business expenses.

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

Understanding the 15.3% Self-Employment Tax

This tax covers both Social Security and Medicare taxes. Unlike traditional employment where these taxes are withheld from your paycheck, as an independent contractor, you are responsible for paying both the employer and employee portions, totaling 15.3% on net earnings exceeding $400. Remember to factor this into your tax planning throughout the year.