Uber Driver Taxes in South Carolina - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in South Carolina

Navigating the Palmetto State as an Uber driver offers flexibility, but also brings unique tax responsibilities. As an independent contractor, understanding these 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. Crucially, income exceeding $400 requires payment of self-employment taxes, covering both Social Security and Medicare contributions, which are not automatically withheld from your earnings by Uber. Accurate record-keeping throughout the year is essential to maximize deductions and minimize tax liability.

How South Carolina Handles Gig Worker Taxes

As a resident of South Carolina, you are required to file a state income tax return, even if no state income tax is due. South Carolina employs a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, South Carolina’s primary form for self-employed individuals to report income and calculate tax liability is Form SC1040. This form is used in conjunction with your federal return. South Carolina also allows for itemized deductions similar to the federal level, potentially reducing your taxable income. It's important to note that South Carolina does not have a separate self-employment tax; instead, the self-employment tax paid at the federal level is deductible on your South Carolina income tax return. Furthermore, South Carolina offers various credits and deductions that may be applicable to gig workers, such as those related to business expenses. Staying informed about changes to South Carolina tax laws is vital, and resources are available through the South Carolina Department of Revenue: https://www.sc.gov/revenue. Failing to file a state return, or filing inaccurately, can result in penalties and interest.

Top Tax Deductions for South Carolina 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 South Carolina’s relatively moderate gas prices, the standard mileage rate is likely to be a beneficial option for most drivers.
• Tolls & Parking: Keep detailed records of any tolls incurred while actively driving for Uber. Parking fees directly related to pickups and drop-offs are also deductible. While South Carolina doesn’t have extensive toll roads, any tolls encountered during trips should be tracked.
• Phone & Data Plan: You can deduct the percentage of your phone bill and data plan that is used for business purposes. If you use your phone 70% of the time for Uber-related activities, you can deduct 70% of the cost.
• Vehicle-Related Costs: Expenses like car washes, phone mounts, dash cams, first-aid kits, and insulated food bags used for deliveries are deductible. Maintain receipts for all purchases.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses (like gas, oil changes, repairs, and 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. Unlike traditional employment where these taxes are withheld from your paycheck, as an independent contractor, 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 to avoid a large tax bill when filing.