Uber Driver Taxes in Dallas, Texas - 2026

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Dallas, Texas

Navigating the bustling streets of Dallas as an Uber driver offers flexibility, but also brings unique tax responsibilities. Successfully managing these obligations is crucial for avoiding penalties and maximizing returns.

As an independent contractor, income earned through Uber (and other gig platforms) is reported to the IRS on Schedule C (Profit or Loss from Business). This means drivers are responsible for paying both income tax and self-employment tax, which covers Social Security and Medicare contributions. Unlike traditional employment, these taxes are not automatically withheld from earnings, requiring proactive tax planning and potentially quarterly estimated tax payments.

How Texas Handles Gig Worker Taxes

The big perk in the Lone Star State is no personal income tax. However, be aware of the Texas Franchise Tax. While it has a high threshold (over $1.2 million) that rarely applies to solo gig workers, it's a key part of the state's business tax structure. Even without state income tax, Uber drivers in Dallas are still subject to federal income and self-employment taxes. It’s important to accurately track mileage and expenses, as these deductions significantly reduce taxable income. Consider the specific demands of driving in Dallas – peak hours around events at the American Airlines Center or the State Fair of Texas can lead to higher earnings, but also increased mileage. Parking costs, especially downtown, can also add up and become a significant deductible expense. Furthermore, while Texas doesn’t have a specific gig worker classification law, the IRS generally views Uber drivers as independent contractors. Staying informed about potential changes in tax law is vital. The Texas Comptroller of Public Accounts provides resources for businesses, including information on franchise tax and other relevant regulations.

For more information on Texas business taxes, visit the Texas Comptroller website.

Top Tax Deductions for Dallas, Texas Drivers

• Standard Mileage: The #1 deduction. The 2025 rate is 70 cents/mile. With relatively lower gas prices in Texas compared to states like California, the standard mileage rate is often the most advantageous method for maximizing deductions.
• Tolls & Parking: Dallas utilizes the TxTag system for electronic toll collection. Keep detailed records of all toll expenses incurred while actively driving for Uber, as well as parking fees, particularly those incurred while waiting for ride requests in areas like Uptown or Deep Ellum.
• Phone & Data Plan: The percentage of your phone and data plan attributable to business use is deductible. If you use your phone solely for Uber driving, you can deduct the entire cost.
• Vehicle-Related Costs: Expenses like car washes to maintain a professional appearance, phone mounts, dash cams, and insulated food bags (if delivering food) are all potentially 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 largest deduction.

Understanding the 15.3% Self-Employment Tax

The 15.3% self-employment tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. Because Uber and similar platforms do not withhold these taxes from your earnings, it’s your responsibility to calculate and pay them, typically through quarterly estimated tax payments to the IRS. This tax is applied to your net earnings – your total Uber income minus your deductible business expenses.