Uber Driver Taxes in North Dakota - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in North Dakota: Navigating Your Financial Route

Embarking on the open roads of North Dakota as an Uber driver offers a unique blend of flexibility and entrepreneurial spirit. However, this independent contractor status comes with distinct tax responsibilities that, when understood and managed proactively, can lead to significant tax savings. As a self-employed individual, you are essentially running your own small business, and that means taking charge of your tax planning from day one.

The Internal Revenue Service (IRS) requires all Uber drivers to report their earnings as self-employment income. This income is detailed on Schedule C (Profit or Loss From Business) when you file your federal income tax return. If your net earnings from self-employment exceed $400, you are responsible for paying self-employment taxes, which cover your contributions to both Social Security and Medicare. A critical point to remember is that platforms like Uber do not withhold these taxes from your pay. This places the onus on you, the driver, to calculate and remit these taxes, typically through quarterly estimated tax payments throughout the year to avoid penalties.

North Dakota State Taxes: What Gig Workers Need to Know

As a resident of North Dakota, you'll also need to file a state income tax return, generally regardless of your income level. North Dakota operates on a graduated income tax system, meaning your tax rate gradually increases as your taxable income rises. For the 2025 tax year, self-employed individuals, including Uber drivers, will use Form ND-1, the Individual Income Tax Return, to report their earnings. There isn't a separate form specifically for gig workers; all income, including your earnings from Uber, is reported on this standard state form.

North Dakota allows for various deductions and credits that can potentially reduce your state tax liability. You can generally claim either the state's standard deduction or itemize your deductions, similar to federal filing. It's always wise to compare both options to see which yields a greater tax benefit. Remember that state tax rates and regulations can be adjusted annually, so for the most current information, it is vital to consult the official North Dakota Office of State Tax Commissioner website. Regarding sales tax, Uber typically handles any applicable sales tax obligations on behalf of drivers, so you usually won't need to collect or remit state sales tax yourself for ride-sharing services.

Maximizing Your Deductions: Key Savings for North Dakota Drivers

One of the biggest advantages of being an independent contractor is the ability to deduct legitimate business expenses, which directly reduces your taxable income. For North Dakota drivers, understanding and meticulously tracking these deductions is paramount to lowering your tax bill. Here are some of the most common and impactful deductions:

• Vehicle Expenses: Standard Mileage vs. Actual Expenses. This is often the largest deduction for Uber drivers.
  • Standard Mileage Rate: For the 2025 tax year, this rate is 70 cents per mile for business use. Given North Dakota's vast distances and often challenging winter conditions, which can significantly wear on a vehicle, the standard mileage deduction is frequently the most straightforward and beneficial option. It accounts for gas, oil, maintenance, repairs, and depreciation without needing to track individual receipts for those items.
  • Actual Expenses: Alternatively, you can deduct the actual costs of operating your vehicle for business. This includes gas, oil, repairs, tires, insurance, registration fees, and even depreciation of the vehicle itself. This method requires meticulous record-keeping of every car-related expense.

  Crucial Decision: You cannot deduct both the standard mileage rate and actual car expenses in the same tax year. Choosing the method that yields the larger deduction is key. Our Advanced Calculator, found below, can help you compare these two methods, including factoring in depreciation, to determine which offers you the greatest tax savings.

• Tolls and Parking Fees: While North Dakota isn't known for extensive toll roads, any tolls or parking fees you incur while actively on an Uber trip- picking up or dropping off passengers, or positioning for a fare- are fully deductible.
• Phone and Data Plan: Your smartphone is essential for your Uber business. The portion of your monthly phone bill and data plan directly attributable to your driving activities is deductible. Make sure to keep detailed logs or estimates of your business versus personal usage.
• Vehicle-Related Supplies and Maintenance: Expenses like regular car washes (especially critical during North Dakota's winter months to combat road salt and grime), phone mounts, dash cams, first-aid kits, and even insulated food bags if you also do Uber Eats deliveries, are all legitimate business deductions.
• Commissions and Fees: The fees Uber charges you for using their platform are deductible business expenses.
• Car Loan Interest: If you have a car loan for the vehicle you use for Uber, the business-use portion of the interest paid on that loan is deductible.
• Roadside Assistance: Membership fees for services like AAA are deductible to the extent they are used for business purposes.
• Home Office Deduction: If you use a specific, exclusive, and regular area in your home primarily for administrative or management activities related to your Uber business (e.g., managing records, planning routes, tracking expenses), you may be eligible for the home office deduction. Our Advanced Calculator can assist you in calculating potential savings from this deduction.
• Health Insurance Premiums: If you are self-employed and not eligible to participate in an employer-sponsored health plan (either your own or your spouse's), you may be able to deduct the premiums you pay for health insurance for yourself, your spouse, and your dependents.
• Professional Fees: Costs for tax preparation software or hiring a tax professional to prepare your Schedule C are also deductible.

The Powerful Qualified Business Income (QBI) Deduction

Beyond standard business expense deductions, many self-employed individuals, including Uber drivers, may be eligible for the Qualified Business Income (QBI) deduction, also known as the Section 199A deduction. This can be a significant tax saver, allowing eligible taxpayers to deduct up to 20% of their qualified business income. There are income limitations and other rules that apply, but for many individual Uber drivers, this deduction can dramatically reduce your federal income tax liability. It's a complex deduction, so we recommend exploring its specifics or consulting a tax professional to see if you qualify and how much you could save.

Understanding the 15.3% Self-Employment Tax

This critical tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. Because Uber classifies you as an independent contractor, they do not withhold these taxes from your earnings. Therefore, it is entirely your responsibility to calculate and pay this tax, typically through quarterly estimated tax payments to the IRS. Ignoring this obligation can lead to significant penalties, including underpayment penalties.

A key benefit to offset this tax is that you can deduct one-half of your self-employment taxes from your gross income when calculating your Adjusted Gross Income (AGI). This deduction helps reduce your overall taxable income.

Your Essential Tool: The Advanced Calculator

To help you confidently navigate these tax waters, especially when comparing vehicle expense methods or assessing home office savings, we encourage you to utilize our Advanced Calculator. It's designed to give you clear insights into your potential deductions and overall tax picture, ensuring you make the most informed decisions for your North Dakota Uber business.

Resource: For more detailed information on North Dakota state taxes and regulations, please visit the North Dakota Office of State Tax Commissioner.