TaskRabbit Taxes in New Mexico - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for TaskRabbits in New Mexico

From helping with moving in Albuquerque to assembling furniture in Santa Fe, TaskRabbit provides flexible income opportunities across the Land of Enchantment. However, that income comes with tax responsibilities. As an independent contractor utilizing the TaskRabbit platform, understanding these obligations is crucial for avoiding penalties and maximizing potential deductions.

The IRS requires all TaskRabbits 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. Platforms such as TaskRabbit do not withhold these taxes, meaning it’s the responsibility of the TaskRabbit to calculate and remit them, typically through estimated tax payments throughout the year.

How New Mexico Handles Gig Worker Taxes

As a resident of New Mexico, filing a state income tax return is required, even if federal taxes have been fully paid. New Mexico utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, self-employed individuals will primarily use Form W-4 to calculate and pay estimated taxes, and Form NMPR-2 (New Mexico Personal Income Tax Return) to file their annual return. New Mexico also has a compensating tax rate, which is applied to federal taxable income to determine your New Mexico taxable income. The rates for the 2025 tax year are expected to be similar to those in 2024, ranging from 1.7% to 4.9% depending on your income bracket. It’s important to note that New Mexico allows for certain deductions and credits that can reduce your overall tax liability, such as the Working Families Tax Credit. New Mexico also has specific rules regarding deductions for business expenses, so maintaining accurate records is paramount. The New Mexico Taxation and Revenue Department provides comprehensive information and resources for self-employed individuals; their website can be found at https://www.tax.newmexico.gov/. Failure to file and pay state taxes on time can result in penalties and interest charges.

Top Tax Deductions for New Mexico Drivers

• Standard Mileage: The #1 deduction for most TaskRabbits. The 2025 rate is 70 cents per mile. Given New Mexico’s relatively expansive geography and the need to travel between jobs in cities like Albuquerque and Las Cruces, this rate can significantly reduce taxable income.
• Tolls & Parking: While New Mexico doesn’t have extensive toll road systems, any tolls incurred while performing TaskRabbit work are deductible. Parking fees directly related to task completion are also deductible.
• Phone & Data Plan: If you use your phone for scheduling tasks, communicating with clients, or navigating to job sites, you can deduct the percentage of your monthly bill attributable to business use.
• Vehicle-Related Costs: Expenses like car cleaning supplies, phone mounts for hands-free operation, or insulated bags for food delivery tasks 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

This tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. Because TaskRabbit and similar platforms classify you as an independent contractor, they do not withhold these taxes from your earnings. Therefore, it is your responsibility to calculate and pay this tax, typically through quarterly estimated tax payments to the IRS.