Driving for Uber (or Doordash, Lyft, etc.) can have significant tax implications. Because you are considered an independent contractor rather than an employee, you will be responsible for paying your own taxes on the income you earn from driving for Uber.

Here are a few of the tax considerations to keep in mind if you drive for Uber:

Income

On your Uber account, you will have access to a tax summary which will break down gross earnings and your net payout. Your gross earnings should match your 1099.

Uber will send you a 1099-K if:

• You earned more than $20,000 in customer payments in the last year and
• You provided at least 200 rides or deliveries in the last year

Uber will send you a 1099-NEC for:

• Payments from promotion, referral, and other miscellaneous payments

Expenses

Your tax summary should also have a section that includes Expenses, Fees, and Tax. This breakdown will need to be reported in the appropriate section on Schedule C on your individual tax return. 

Mileage

Apart from the expenses for commissions paid to Uber, mileage is going to be your largest deduction. Uber provides a mileage log for miles logged using Uber. This mileage includes miles spent waiting for a trip, on your way to pick up passengers or order, and the trip itself. 

If you were using multiple services at the same time (like queuing an order on Doordash while finishing a trip) you are only allowed to count the mileage once. If you are using multiple gig apps, you should be independently tracking mileage via apps like MileIQ to get the most accurate data.

New Mileage Rate

Once you have your mileage number you will need to then separate between miles driven before and after 6/30/2022. In 2022 the IRS announced that the mileage rate would increase from 58.5 cents per mile to 62.5 cents per mile. This increase was due to the increase in fuel prices for 2022. 

Conclusion

It’s important to keep in mind that the tax implications of driving for Uber can be complex and vary depending on your individual circumstances. It’s a good idea to consult with a tax professional or financial advisor to ensure you are properly reporting your income and taking advantage of all the deductions and credits available to you. It is a necessity to keep track of your income, expenses, and mileage to make the tax filing process easier.