Uber Driver Taxes in Houston, Texas - 2026

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Houston, Texas

Navigating the bustling streets of Houston as an Uber driver offers flexibility, but it also comes with tax responsibilities. As an independent contractor, earnings from ridesharing are considered self-employment income, requiring careful tracking and reporting to the IRS.

The federal government requires Uber drivers to report their income and expenses on Schedule C (Profit or Loss from Business) when filing their annual tax return. Crucially, this income is also subject to self-employment tax, 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 your tax liability.

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. As an Uber driver operating in Houston, you won’t face state income tax on your earnings, but you are still responsible for federal income and self-employment taxes. Houston’s expansive geography and frequent special events (like the Houston Livestock Show and Rodeo) can lead to increased demand, and therefore increased earnings, making diligent tax planning even more important. Consider the costs associated with driving in the city – parking fees near popular destinations like the Theater District or Minute Maid Park, and potential wear and tear on your vehicle from navigating Houston’s traffic. While Texas doesn’t have a state income tax, it’s vital to understand the federal implications of your earnings. Remember to keep detailed records of all income and expenses, as the IRS may request documentation to support your claims. Staying organized will streamline the filing process and help avoid potential penalties. For more information on Texas taxes and business regulations, visit the Texas Comptroller of Public Accounts website.

Top Tax Deductions for Houston, 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 Uber drivers in Houston.
• Tolls & Parking: Houston drivers frequently encounter tolls on Beltway 8 and other roadways. Keep meticulous records of all TxTag or EZ Tag tolls paid for business purposes. Parking expenses incurred while waiting for or picking up passengers are also deductible.
• Phone & Data Plan: The percentage of your phone and data plan attributable to business use (e.g., navigation, Uber app) is deductible. Keep records of total usage to justify the business portion.
• Vehicle-Related Costs: Expenses like car washes, air fresheners, phone mounts, dash cams, and insulated food bags (if delivering through Uber Eats) are deductible as business expenses.

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

Self-employment tax is a combined Social Security and Medicare tax for individuals who work for themselves. Because Uber doesn’t withhold these taxes from your payments, you are responsible for calculating and paying them directly to the IRS. This tax rate is 15.3% on net earnings over $400. You can reduce your self-employment tax liability by deducting one-half of your self-employment tax from your gross income.