Uber Driver Taxes in Maryland - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Maryland

Navigating the bustling streets of Baltimore, Annapolis, or Bethesda as an Uber driver offers flexibility, but also brings unique tax responsibilities. As an independent contractor, earnings from Uber and other gig platforms are considered self-employment income, requiring careful tax planning and reporting.

The IRS requires Uber drivers to report their income and expenses on Schedule C (Profit or Loss From Business) when filing their federal income tax return. Crucially, this income is also subject to self-employment tax, covering both Social Security and Medicare taxes, which are not automatically withheld from your earnings. Accurate record-keeping throughout the year is essential to maximize deductions and minimize tax liability.

How Maryland Handles Gig Worker Taxes

As a resident of Maryland, a state income tax return is required, regardless of income level. Maryland utilizes a graduated income tax system, meaning the tax rate increases as your taxable income rises. For the 2025 tax year, self-employed individuals will primarily use Form 502, Individual Income Tax Return, to report their earnings. Maryland also has a separate tax on income derived from providing services within the state. This is generally calculated as a percentage of your gross income. It's important to note that Maryland allows for a subtraction modification for the self-employment tax paid, which can reduce your overall state tax liability. Furthermore, Maryland offers various credits and deductions that may be applicable to Uber drivers, such as those related to business expenses. The state also has specific rules regarding estimated tax payments; if your tax liability is expected to be $500 or more, you are generally required to make quarterly estimated tax payments to avoid penalties. Failure to do so can result in underpayment penalties. Staying current with Maryland tax laws is vital, as they can change annually.

For detailed information and resources, please visit the Maryland Comptroller's Office website: https://www.marylandtaxes.gov/

Top Tax Deductions for Maryland Drivers

• Standard Mileage: The most popular deduction for Uber drivers. The 2025 rate is 70 cents per mile for business use. This simplifies expense tracking significantly.
• Tolls & Parking: Maryland drivers frequently encounter tolls on I-95 and the Baltimore-Washington Parkway. These tolls, along with parking fees incurred while actively driving for Uber, are deductible.
• Phone & Data Plan: The portion of your cell phone and data plan used for Uber driving is deductible. Keep records of business usage to justify the deduction.
• Vehicle-Related Costs: Expenses like car washes, air fresheners, phone mounts, dash cams, 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, 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. Unlike traditional employment, Uber does not withhold these taxes from your earnings. Therefore, it’s your responsibility to calculate and pay this tax, typically through quarterly estimated tax payments to the IRS. The self-employment tax applies to net earnings exceeding $400.