Uber Driver Taxes in Boston, Massachusetts - 2026

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Boston, Massachusetts

Navigating the historic streets of Boston as an Uber driver offers flexibility, but also brings unique tax considerations. Successfully managing these responsibilities is crucial for avoiding penalties and maximizing returns.

As an independent contractor, income earned through Uber and other ride-sharing platforms is considered self-employment income. This means the IRS requires reporting of all earnings on Schedule C (Profit or Loss From Business) with your Form 1040. Furthermore, drivers are responsible for paying self-employment taxes, which cover both Social Security and Medicare, as these taxes are not automatically withheld from your earnings. Failure to report income or pay taxes can result in significant penalties.

How Massachusetts Handles Gig Worker Taxes

As a resident of Massachusetts, a state income tax return is required even if your federal tax liability is zero. Massachusetts operates under a flat income tax rate, currently at 5.0%, for the 2025 tax year. This means all taxable income is subject to the same rate. Uber drivers in Boston, like all self-employed individuals, must file a Massachusetts Form 1 (Massachusetts Form 1 - Income Tax Return) to report their earnings. Specifically, self-employment income is reported on Schedule SE (Massachusetts Schedule SE - Self-Employment Earnings) which is then transferred to Form 1.

Massachusetts also has a separate excise tax on self-employment income. This tax is calculated on your net earnings from self-employment and is reported on Form 1. The rate for this excise tax is also 5.0% for the 2025 tax year.

Boston drivers should be particularly mindful of tracking expenses related to operating within the city. Parking, which can be notoriously expensive in areas like Back Bay and the Seaport, is a deductible business expense. Similarly, any tolls incurred while driving for Uber within the greater Boston area are also deductible. Keep detailed records of all mileage, parking receipts, and toll charges. The Massachusetts Department of Revenue provides comprehensive information and resources for self-employed individuals on their website: Massachusetts Department of Revenue.

Top Tax Deductions for Boston, Massachusetts Drivers

• Standard Mileage: The most popular and often simplest deduction. The 2025 rate is 70 cents per mile. Given Boston's traffic congestion and relatively high gas prices, this rate is likely to be advantageous for most drivers.
• Tolls & Parking: Boston's toll roads (like the Massachusetts Turnpike) and expensive parking fees can add up. Keep meticulous records of all toll and parking expenses.
• Phone & Data Plan: The portion of your phone and data plan used for Uber driving (e.g., navigation, driver app) is deductible. Document the business use percentage.
• Vehicle-Related Costs: Expenses like car washes (to maintain a professional appearance for passengers), phone mounts, dash cams, and insulated food bags 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

The 15.3% self-employment 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 crucial to calculate and pay this tax, typically through estimated tax payments made quarterly to the IRS. Failing to do so can result in underpayment penalties.