Uber Driver Taxes in Kentucky - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Kentucky

Navigating the Bluegrass State 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. Earnings over $400 necessitate the payment of self-employment taxes, covering both Social Security and Medicare contributions, which are not automatically withheld from your Uber payouts.

How Kentucky Handles Gig Worker Taxes

As a resident of Kentucky, filing a state income tax return is required, even if no Kentucky income tax is due. Kentucky operates under a flat income tax rate, currently at 4.0% for the 2025 tax year. This means all taxable income is taxed at the same rate. Self-employed individuals, including Uber drivers, will use Form 740, Kentucky Income Tax Return, to report their income and calculate their tax liability. Specifically, Schedule SE (Self-Employment Earnings) will be used to calculate your net earnings subject to Kentucky income tax. Kentucky also allows for a deduction for the federal self-employment tax paid, which can reduce your overall state tax burden. It's important to note that Kentucky conforms to many federal tax provisions, but it's always best to consult the Kentucky Department of Revenue for the most up-to-date information and any specific changes. Kentucky also offers various credits and deductions that may be applicable to self-employed individuals, so thorough research is recommended. Remember to keep accurate records of all income and expenses throughout the year to ensure accurate reporting and maximize potential deductions. For more detailed information and resources, please visit the Kentucky Department of Revenue website: https://revenue.ky.gov/

Top Tax Deductions for Kentucky 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 Kentucky's relatively moderate gas prices, the standard mileage rate is likely to be a beneficial option for most drivers.
• Tolls & Parking: Kentucky has some toll roads, particularly around Louisville. Keep detailed records of all toll expenses 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 gig 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. Failure to do so may result in penalties.