Uber Driver Taxes in Montana - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Montana

Navigating the Big Sky Country as an Uber driver offers flexibility, but it also comes with tax responsibilities. As an independent contractor, understanding how to properly report income and claim deductions is crucial for maximizing earnings and staying compliant with both federal and Montana state tax laws.

The IRS requires Uber drivers to report their earnings on Schedule C (Profit or Loss From Business) as self-employment income. This means drivers are responsible for paying both income tax and self-employment tax, which covers Social Security and Medicare contributions. Platforms like Uber do not withhold these taxes, so proactive tax planning and potential quarterly estimated tax payments are essential.

How Montana Handles Gig Worker Taxes

As a resident of Montana, filing a state income tax return is required, even if no Montana income tax is due. Montana utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Montana’s income tax brackets are subject to adjustment, but understanding the current structure is vital for accurate filing. The primary form for self-employed individuals to report income and calculate tax liability is Form 2 (Montana Individual Income Tax Return). This form, along with Schedule 1 (Adjustments to Income) and Schedule A (Itemized Deductions), will be used to report your Uber earnings and any applicable deductions. Montana also allows for itemized deductions similar to the federal level, which can further reduce your tax burden. It's important to note that Montana's tax laws are subject to change, so staying updated through official state resources is recommended. Furthermore, Montana offers various credits and deductions that may be applicable to self-employed individuals, such as those related to business expenses or healthcare costs. Consulting with a tax professional familiar with Montana tax law is highly recommended to ensure full compliance and maximize potential savings. The Montana Department of Revenue provides comprehensive information and resources for taxpayers, including downloadable forms and instructions.

You can find more information on the Montana Department of Revenue website: https://revenue.mt.gov/

Top Tax Deductions for Montana 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 Montana’s vast distances and potential for significant mileage, this deduction can substantially reduce taxable income.
• Tolls & Parking: While Montana doesn’t have extensive toll roads, any parking fees incurred while actively working (picking up or dropping off passengers) are deductible.
• Phone & Data Plan: The portion of your monthly phone and data bill used for business purposes is deductible. Keep detailed records of business usage.
• Vehicle-Related Costs: Expenses like car cleaning supplies, 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, insurance) in the same tax year. Choose the method that yields the larger deduction.

Understanding the 15.3% Self-Employment Tax

This tax covers both Social Security and Medicare taxes. As an Uber driver classified as an independent contractor, you are responsible for paying both the employer and employee portions of these taxes, totaling 15.3% on net earnings exceeding $400. Remember, Uber and other platforms do not withhold these taxes from your earnings, making quarterly estimated tax payments a prudent strategy to avoid penalties.