Uber Driver Taxes in Indiana - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Indiana

Navigating the bustling streets of Indianapolis and beyond 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 considers Uber drivers self-employed, meaning income earned through the platform is subject to both income tax and self-employment tax. All earnings must be reported on Schedule C (Profit or Loss from Business) when filing your federal income tax return. Furthermore, earnings exceeding $400 require the payment of self-employment tax, covering both Social Security and Medicare contributions, which are not automatically withheld from your Uber payouts.

How Indiana Handles Gig Worker Taxes

As a resident of Indiana, you are required to file a state income tax return, even if no Indiana income tax was withheld. Indiana operates under a flat income tax rate, currently at 3.15% for the 2025 tax year. This means all taxable income is taxed at the same rate. Uber drivers, being independent contractors, will report their income and expenses on Schedule SE (Self-Employment Tax) and then transfer the net profit to Form IT-1040, Indiana Resident Income Tax Return. The primary form for self-employed individuals to use when filing their Indiana state income taxes is Form IT-1040. Indiana also requires you to pay estimated taxes quarterly if you expect to owe $1,000 or more in state income tax. Failure to do so may result in penalties. Indiana’s Department of Revenue offers resources and tools to help navigate these requirements, including online filing options and payment plans. It’s important to keep accurate records of all income and expenses throughout the year to ensure accurate reporting and maximize potential deductions. Indiana also allows for certain business expenses to be deducted, mirroring many of the federal deductions available to self-employed individuals. Consulting with a tax professional familiar with Indiana tax law is highly recommended to ensure full compliance and optimize your tax strategy.

Top Tax Deductions for Indiana 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 Indiana’s relatively stable gas prices, this rate provides a significant benefit.
• Tolls & Parking: Indiana has toll roads, particularly the Indiana Toll Road. Keep detailed records of all tolls paid and parking fees incurred while actively driving for Uber.
• Phone & Data Plan: You can deduct the percentage of your phone and data plan that is used for business purposes. Maintain a log of business-related calls and data usage to support your 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, oil changes, repairs, 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. 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 estimated tax payments made quarterly to the IRS.

Resource: Indiana Department of Revenue