Uber Driver Taxes in Colorado - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Colorado

Navigating the Rocky Mountains and Denver’s bustling streets as an Uber driver offers flexibility, but also brings unique tax responsibilities. As an independent contractor, understanding these obligations is crucial for a smooth tax season.

The IRS requires Uber drivers to report their earnings as self-employment income on Schedule C (Profit or Loss From Business) when filing their federal income tax return. This means not only income tax, but also self-employment tax – essentially Social Security and Medicare taxes for the self-employed – will be due. Self-employment tax applies to net earnings (income minus business expenses) exceeding $400.

How Colorado Handles Gig Worker Taxes

As a resident of Colorado, filing a state income tax return is required, even if no federal tax is owed. Colorado utilizes a flat income tax rate, currently at 4.40% for the 2025 tax year. This means all taxable income is subject to the same rate, simplifying the state tax calculation. Uber drivers operating in Colorado will report their self-employment income on Form DR 0104, Colorado Declaration of Estimated Tax for Individuals, and ultimately on Form 104-ES, Colorado Individual Income Tax Return. Colorado also requires taxpayers to report income from sources outside of wages, which directly applies to earnings from gig work like driving for Uber. It’s important to accurately track mileage and expenses to reduce taxable income. Colorado’s Department of Revenue offers resources and guidance specifically for self-employed individuals, including information on estimated tax payments to avoid penalties. Remember, Colorado does not have local income taxes levied by cities or counties, streamlining the state tax process. Keep detailed records of all income and expenses, as Colorado may request documentation to support deductions claimed on your return. Failure to file or pay taxes on time can result in penalties and interest charges.

Top Tax Deductions for Colorado Drivers

• Standard Mileage: The most popular deduction for Uber drivers. The 2025 rate is 70 cents per mile. Given Colorado’s diverse terrain and potential for longer trips to mountain destinations, maximizing mileage tracking is particularly important.
• Tolls & Parking: While Colorado doesn’t have extensive toll roads like some states, any tolls incurred during rides, as well as parking fees directly related to picking up or dropping off passengers, are deductible.
• Phone & Data Plan: The portion of your cell phone and data plan used for Uber driving is deductible. Keep records of business use versus personal use 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.

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 yields the larger 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. This combined rate of 15.3% is applied to your net earnings (income after expenses) exceeding $400. You can reduce your adjusted gross income (AGI) by one-half of your self-employment tax liability, which can further lower your overall tax burden.

Resource: For more information on Colorado state taxes, visit the Colorado Department of Revenue: https://www.colorado.gov/revenue