Uber Driver Taxes in New Jersey - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in New Jersey

Navigating the Garden State’s roadways as an Uber driver offers flexibility, but also brings unique tax responsibilities. As an independent contractor, understanding these obligations is crucial for avoiding penalties and maximizing potential savings.

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. Earnings over $400 necessitate the payment of self-employment taxes, which cover both Social Security and Medicare contributions. Accurate record-keeping throughout the year is essential for proper reporting.

How New Jersey Handles Gig Worker Taxes

As a resident of New Jersey, filing a state income tax return is mandatory, even if no federal tax is owed. New Jersey operates on a graduated income tax system, meaning the tax rate increases as your income rises. This means the amount of state income tax owed will vary based on your total earnings for the year. The primary form for self-employed individuals to report income and calculate tax liability is Form NJ-1040, along with Schedule NJ-SE (Self-Employment Earnings). New Jersey also requires you to pay estimated taxes quarterly if you expect to owe $1,000 or more in state income tax. Failure to do so can result in penalties. New Jersey does not offer a separate tax form specifically for gig workers; they are treated as any other self-employed individual. It's important to note that New Jersey conforms to many federal deductions, but it's always best to consult the official state guidelines for any differences. The Division of Taxation in New Jersey provides comprehensive resources and information for taxpayers, including details on estimated tax payments and filing requirements. You can find more information at New Jersey Division of Taxation.

Top Tax Deductions for New Jersey 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: New Jersey drivers frequently encounter tolls on the New Jersey Turnpike and Garden State Parkway. These tolls, along with parking fees incurred while actively driving for Uber, are deductible.
• Phone & Data Plan: If you use your phone for Uber-related activities (navigation, accepting rides, communication), you can deduct the percentage of your monthly bill attributable to business use.
• Vehicle-Related Costs: Expenses like car washes, phone mounts, dash cams, first-aid kits, 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 comprises Social Security and Medicare taxes. 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. This combined rate of 15.3% applies to your net earnings (income after deductions) exceeding $400. Remember to factor this into your tax planning throughout the year.