Uber Driver Taxes in Vermont - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Uber Drivers in Vermont

Navigating the scenic routes of Vermont as an Uber driver offers flexibility, but also brings unique tax responsibilities. As an independent contractor, earnings from Uber and other gig platforms are considered self-employment income, requiring careful tax planning and reporting.

The IRS requires Uber drivers to report their income and expenses on Schedule C (Profit or Loss From Business) when filing their federal income tax return. Crucially, this income is also subject to self-employment tax, covering both Social Security and Medicare taxes, which are not automatically withheld from your earnings. Accurate record-keeping throughout the year is essential to maximize deductions and ensure compliance.

How Vermont Handles Gig Worker Taxes

As a resident of Vermont, a state income tax return is required, regardless of income level. Vermont operates on a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, self-employed individuals will primarily use Form INC-100, Vermont Income Tax Return, to report their earnings. Vermont also requires Schedule IN-101, Adjustments to Income, to report certain deductions and adjustments, including the self-employment tax deduction (which reduces your adjusted gross income). Vermont’s Department of Taxes closely monitors gig economy income, and accurate reporting is vital to avoid potential penalties. Vermont also has a use tax on purchases made outside the state that are used in Vermont, which may apply to certain vehicle-related expenses. Remember to keep detailed records of all income and expenses, as Vermont may request supporting documentation during an audit. Vermont’s tax laws are subject to change, so staying informed through official sources is crucial. Vermont also offers various credits and deductions that may be applicable to self-employed individuals, so exploring these options can help minimize your tax liability.

For more information and resources, please visit the Vermont Department of Taxes: https://tax.vermont.gov/

Top Tax Deductions for Vermont Drivers

• Standard Mileage: The most popular and often simplest deduction. The 2025 rate is 70 cents per mile for business use. Given Vermont’s rural landscape and potential for longer trips between fares, this rate can significantly reduce taxable income.
• Tolls & Parking: While Vermont doesn’t have extensive toll roads, any tolls incurred while actively working (e.g., trips to airports outside the state) are deductible. Parking fees directly related to rides 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 business-related calls and data usage to support this deduction.
• Vehicle-Related Costs: Expenses like car washes, phone mounts, dash cams, first-aid kits, 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, oil changes, repairs, insurance, and depreciation) 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 these taxes are withheld from your paycheck, as an Uber driver, you are responsible for paying both the employer and employee portions, totaling 15.3% on net earnings over $400. However, you can deduct one-half of your self-employment tax from your gross income, which can help lower your overall tax liability.