Uber Driver Taxes in New Mexico - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in New Mexico

Cruising the Land of Enchantment and earning with Uber offers flexibility, but navigating the tax landscape requires careful attention. As an independent contractor, understanding your federal and state tax obligations is crucial for a smooth tax season.

The IRS requires Uber drivers to report their income on Schedule C (Profit or Loss From Business) with Form 1040. Because you are self-employed, no taxes are automatically withheld, meaning you are responsible for paying both income tax and self-employment tax on your net earnings (income minus expenses). If your net earnings exceed $400, you will be subject to self-employment tax.

How New Mexico Handles Gig Worker Taxes

As a resident of New Mexico, you are required to file a state income tax return, even if no New Mexico income tax is due. New Mexico utilizes a graduated income tax system, meaning the tax rate increases as your income increases. This means the amount of tax you owe depends on your total taxable income and filing status. The primary form for self-employed individuals to report income and calculate tax liability is Form W-4 and Form NMPR-2. New Mexico also requires you to pay estimated taxes quarterly if you expect to owe $1,000 or more in taxes for the year. This prevents penalties at tax time. The New Mexico Taxation and Revenue Department offers resources and tools to help you understand your obligations and file accurately. New Mexico also allows for certain credits and deductions that can reduce your tax liability, so it's important to explore all available options. Keep detailed records of all income and expenses related to your Uber driving activity, as this documentation will be essential when filing your state tax return. Remember to check the New Mexico Taxation and Revenue Department website for the most up-to-date information and forms, as tax laws can change annually.

You can find more information and resources at the New Mexico Taxation and Revenue Department.

Top Tax Deductions for New Mexico Drivers

• Standard Mileage: The #1 deduction for most drivers. The 2025 rate is 70 cents per mile. Given New Mexico's relatively expansive geography and the distances often driven between cities like Albuquerque, Santa Fe, and Las Cruces, the standard mileage rate is often a very beneficial option.
• Tolls & Parking: While New Mexico doesn't have extensive toll roads, any tolls incurred while actively driving for Uber are deductible. Parking fees directly related to pickups and drop-offs are also deductible.
• Phone & Data Plan: You can deduct the percentage of your phone and data plan that is used for business purposes. Keep a log of your business usage to support this deduction.
• 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 or repairs in the same 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. Unlike traditional employment where your employer withholds these taxes, as an Uber driver, you are responsible for paying both the employer and employee portions, totaling 15.3% on net earnings over $400. You will calculate this tax on Schedule SE (Self-Employment Tax) and include it with your Form 1040.