Uber Driver Taxes in Hawaii - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Hawaii

Trading the scenic routes of Oahu or the Big Island for fares as an Uber driver offers flexibility, but also brings tax responsibilities. As an independent contractor, navigating these obligations is crucial for financial well-being.

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 Hawaii Handles Gig Worker Taxes

As a resident of Hawaii, filing a state income tax return is mandatory, even if your federal tax liability is zero. Hawaii operates on a graduated income tax system, meaning the tax rate increases as your income rises. This means the more you earn driving for Uber, 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 N-11, the Hawaii General Excise/Income Tax Return. Hawaii also has a General Excise Tax (GET) that applies to most business activities. While Uber typically handles the GET collection and remittance on fares, it's important to understand this tax exists.

Hawaii’s tax brackets for 2025 (based on projections and prior year trends) are expected to remain similar to 2024. Taxpayers should consult the official Hawaii Department of Taxation website for the most up-to-date bracket information. Remember to factor in any applicable credits or deductions available to Hawaii residents, such as those related to childcare or education, to minimize your tax burden. Accurate record-keeping of all income and expenses is paramount for a smooth and compliant tax filing process. Failure to file or pay taxes on time can result in penalties and interest charges.

For more information and resources, please visit the Hawaii Department of Taxation: https://tax.hawaii.gov/

Top Tax Deductions for Hawaii Drivers

• Standard Mileage: The most popular deduction for Uber drivers. For the 2025 tax year, the standard mileage rate is 70 cents per mile. Given Hawaii’s relatively high cost of living and fuel prices, utilizing the standard mileage rate is often the most advantageous approach.
• Tolls & Parking: While Hawaii doesn’t have traditional toll roads, parking fees incurred while actively working (picking up or dropping off passengers) are deductible. Keep detailed records of these expenses.
• Phone & Data Plan: The portion of your cell phone and data plan used for Uber driving is deductible. If you use your phone 60% for Uber and 40% for personal use, you can deduct 60% of the bill.
• Vehicle-Related Costs: Expenses like car washes to maintain a professional appearance, phone mounts, dash cams, and insulated food bags (for Uber Eats) 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 doesn’t withhold these taxes from your earnings, it’s your responsibility to calculate and pay them through estimated tax payments throughout the year, or when you file your annual tax return. Remember, you can deduct one-half of your self-employment tax from your gross income.