Uber Driver Taxes in Michigan - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Michigan

Navigating the roads of Michigan 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 on Schedule C (Profit or Loss From Business) as self-employment income. This means income earned through the Uber platform is subject to both income tax and self-employment tax, which covers Social Security and Medicare contributions. Unlike traditional employment, no taxes are automatically withheld from your Uber earnings, placing the responsibility for estimated tax payments squarely on the driver.

How Michigan Handles Gig Worker Taxes

As a resident of Michigan, you are required to file a state income tax return, even if your only income is from Uber. Michigan operates under a flat income tax rate, currently at 4.05% for the 2025 tax year. This means all taxable income is taxed at the same rate. Self-employed individuals in Michigan utilize Form MI-1040, along with Schedule 1 (Adjustments to Income) and Schedule SE (Self-Employment Tax) to report their earnings and calculate their state tax liability. It’s important to note that Michigan does not offer a specific form tailored solely for gig workers; the standard individual income tax forms are used, but the self-employment schedules are critical. Michigan also allows for itemized deductions, which could further reduce your taxable income. Remember to keep meticulous records of all income and expenses related to your Uber driving activities. The Michigan Department of Treasury provides resources and guidance for self-employed individuals, including information on estimated tax payments and available deductions. Failure to file and pay taxes on time can result in penalties and interest, so proactive tax planning is essential. Michigan also offers online filing options for convenience.

You can find more information and resources on the Michigan Department of Treasury website: Michigan Department of Treasury

Top Tax Deductions for Michigan Drivers

• Standard Mileage: The most popular deduction for Uber drivers. For the 2025 tax year, the standard mileage rate is 70 cents per mile. This simplifies expense tracking significantly.
• Tolls & Parking: Michigan drivers frequently encounter tolls on certain bridges and roads, particularly when traveling to and from Detroit. Keep detailed records of all toll expenses and parking fees incurred while actively driving for Uber.
• Phone & Data Plan: A portion of your monthly cell phone and data plan is deductible if you use it for Uber-related activities (navigation, ride requests, communication). Deduct the percentage of time the phone is used for business.
• Vehicle-Related Costs: Expenses like car washes, phone mounts, dash cams, first-aid kits, and insulated food bags (for Uber Eats) are all deductible as business expenses.

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

The 15.3% self-employment tax is comprised of two parts: 12.4% for Social Security and 2.9% for Medicare. Because Uber and other platforms do not withhold these taxes from your earnings, it’s your responsibility to calculate and pay them, typically through quarterly estimated tax payments to the IRS. This tax applies to net earnings – your profits after deducting business expenses – exceeding $400.