Uber Driver Taxes in Minnesota - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Minnesota

Navigating the Twin Cities 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 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. Furthermore, earnings exceeding $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 Minnesota Handles Gig Worker Taxes

As a resident of Minnesota, filing a state income tax return is required, even if no federal tax is due. Minnesota utilizes a graduated income tax system, meaning the tax rate increases as your income rises. This means your tax liability isn't a flat percentage; different portions of your income are taxed at different rates. For self-employed individuals, including Uber drivers, the primary form used to report income and calculate tax liability is Form M1, Minnesota Income Tax Return, along with Schedule 1, which is used to report business income. Minnesota also has a specific form, Schedule IN, for calculating income tax based on your net earnings from self-employment. It’s important to accurately report your income and deductions to avoid potential penalties. Minnesota also offers various credits and deductions that may apply to self-employed individuals, so thorough research is recommended. Remember to keep detailed records of all income and expenses throughout the year. The Minnesota Department of Revenue provides comprehensive resources and guidance for taxpayers, including information specific to self-employment.

You can find more information and resources on the Minnesota Department of Revenue website: https://www.revenue.state.mn.us/

Top Tax Deductions for Minnesota 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: Keep records of any tolls incurred while driving for Uber, as well as parking fees directly related to pickups or drop-offs. While Minnesota doesn't have extensive toll roads, parking in Minneapolis and St. Paul can add up.
• Phone & Data Plan: You can deduct the percentage of your phone bill and data plan that is used for business purposes. Carefully track the business use versus personal use.
• Vehicle-Related Costs: Expenses like car cleaning supplies, phone mounts, dash cams, and insulated food bags (if delivering food) 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 where these taxes are withheld from your paycheck, as an Uber driver, you are responsible for paying both the employer and employee portions. Platforms like Uber do not withhold these taxes, so it’s crucial to plan for this liability throughout the year, potentially making estimated tax payments quarterly to avoid penalties.