This website contains affiliate links and we may be compensated for referrals.
We may receive a referral fee for recommending some of the products, apps or services listed on this website.
2026 Tax Guide for Uber and Lyft Drivers
Many people turn to rideshare companies such as Uber or Lyft to earn extra money, and for motivated drivers it can be a full-time gig. Understanding rideshare driver taxes is part of the job.
You don’t work for the rideshare company. You are your own boss, subcontracting your services to the company. Because you are an independent contractor, no taxes are taken out of your payouts.
The bad news is that you can face a big tax bill if you don’t make estimated tax payments. For 2026 income, payments are due April 15, June 15 and September 15, 2026, and January 15, 2027. A tax advisor can help you set them up. Below, we explain how to minimize the tax burden rideshare drivers often face.
The best way to lower your bill is to claim every deduction and credit you are legally entitled to as a small business owner. Many drivers overlook them.
As an independent contractor, you will most likely complete the following tax forms:
| Form Name | Purpose |
|---|---|
|
Schedule C, Profit or Loss from Business |
This form summarizes all of your earnings and
expenses from your business to determine the
taxable profit or loss. |
|
Schedule SE, Self Employment Tax |
This form is used to determine the Social
Security and Medicare tax that you owe the IRS,
based on your profit on Schedule C. Unlike an
employee who receives a paycheck, you are
responsible to pay both the employee and
employer share of this tax, which totals 15.3%. |
|
Schedule 1, Additional Income and
Adjustments to Income |
50% of the self-employment tax that you paid
on Schedule SE can be deducted on Form 1040,
Schedule 1. You may also qualify to take the
self-employed health insurance deduction if you
were self-employed and generated a profit for
the year, and you purchase your health insurance
on your own. |
Understanding 3 Tax Reporting Documents
You may receive three different tax reporting documents, and it’s important to understand what they report to you:
Form 1099-K
This form reports your gross earnings from a rideshare company. Uber, for example, refers to the amount as “on-trip gross earnings”. The amount reported is determined by the total dollar amount of payments that were processed, and Form 1099-K does not deduct any expenses. Rideshare drivers deduct expenses on Schedule C.
For 2026, you’ll receive a 1099-K if you meet both of these criteria:
- You earned more than $20,000 in gross earnings for the year, and
- You received payment for more than 200 rides or deliveries during the year
You must report any income earned from driving, even if you don’t receive Form 1099-K. The rideshare company’s tax summary (explained below) will report your earnings.
Form 1099-NEC
Rideshare companies use this form to report bonus and referral fees to you. For payments made in 2026, you will receive a 1099-NEC if you earned $2,000 or more in fees. The threshold was $600 through 2025. Keep in mind that 1099-NEC replaced the 1099-MISC form you may have received in past years.
Even if you earned less than the threshold, you must report all bonus and referral fees on your tax return.
Tax Summary
Finally, Uber and Lyft will send you a tax summary, which lists the income reported on the two 1099 forms (if they apply to you), and selected business expenses. Your commissions, fees, tolls, sales tax paid, and other expenses are listed on the tax summary.
Rideshare companies use the data from rideshare trips to report “on-trip mileage”, which is the miles driven with a passenger in the car, or when you made a delivery. You can deduct additional miles, and that topic is explained below.
Tips deduction: Under the 2025 tax law, rideshare drivers can deduct qualified tips, up to $25,000 per year, for tax years 2025 through 2028. The deduction phases out at higher incomes, and you still owe self-employment tax on tips. Tips must be reported to qualify, so check the IRS guidance or ask your tax pro.
Filing Your Taxes as a Rideshare Driver
Kenneth W. Boyd is a former Certified Public Accountant (CPA), Auditor, Tax Preparer and College Professor. Boyd brings a wealth of business experience to financial education. He has also authored several books on accounting, including ‘Cost Accounting For Dummies’.
How to Deduct Mileage Expenses
There are two ways to deduct vehicle expenses: actual expenses or the standard mileage deduction. Calculate both and use the higher deduction. Choose carefully, though. To use the standard mileage rate for a vehicle, you generally must choose it in the first year you use that car for rideshare driving. If you start with actual expenses, you can’t switch to the standard rate for that vehicle later.
Below is a broad overview of what each type of deduction includes:
| ACTUAL EXPENSES | STANDARD MILEAGE | |
|---|---|---|
|
GENERAL DESCRIPTION |
All your actual expenses related to your rideshare income. Examples are:
|
For 2026, the IRS standard mileage rate is 72.5 cents per mile for miles driven January 1 through June 30. The IRS raised it to 76 cents per mile for July 1 through December 31. So the rate for 2026 is as follows:
You can also add in tolls and parking to the mileage total. |
|
ADVANTAGE |
All expenses are included. |
Limited recordkeeping, most of which is done by the rideshare company, which tracks most of your mileage expense. |
|
DISADVANTAGE |
Requires a higher level of recordkeeping to keep track of the expenses, and backup documentation for the expenses, in case of a tax audit. |
You may be limiting your business expenses, especially if your vehicle is driven primarily for the rideshare business, and has high insurance and repair expenses during the year. |
|
RULE OF THUMB |
If your vehicle is driven more than 75% for your rideshare business- and has a high amount of insurance and repair expenses during the year- this may be the way to go. |
If recordkeeping is difficult for you, or you drive on a limited basis, this may be the way to go. |
Below are some other expenses which you may be eligible to take. This is just a partial list of the most common expenses, and there may be other expenses which are unique to your situation:
| EXPENSE | DESCRIPTION |
|---|---|
|
GENERAL LIABILITY INSURANCE |
You may want to purchase general liability insurance to insure you in manners that auto insurance will not cover. |
|
LEGAL & PROFESSIONAL FEES |
Income tax preparation, accounting, and attorney fees. |
|
OFFICE EXPENSES |
Office supplies |
|
RENT OR LEASE EXPENSE |
Garage rental to store your vehicle when not in use. |
|
MEALS |
50% of snacks and beverages you provide to your customers. |
|
CELL PHONE |
The business portion of the cell phone expenses. If you use your cell phone 75% for rideshare driving, deduct 75% of the monthly bill as an expense. |
|
RIDESHARE ACCESSORIE |
Window decals, lights and signage that identifies you as a driver for a specific company. |
|
QUALIFIED BUSINESS INCOME DEDUCTION |
In general terms, you may be able to deduct up to 20% of your taxable income related to your rideshare business. This deduction is complicated, and you should consult with a tax advisor. |
Here is additional information on calculating business mileage, and how to deduct health insurance costs:
| EXPENSE | DESCRIPTION |
|---|---|
|
MILEAGE TO/FROM WHERE YOU BEGIN AND END YOUR RIDESHARE DAY |
As mentioned above, your rideshare company will provide a tax summary report, which includes mileage driven when you carried a passenger or made a delivery. This mileage total is your starting point. Next, add miles driven to pick up a passenger, and miles driven to a specific location (to perform more work) after dropping off the passenger. These same rules apply to deliveries. |
|
SELF EMPLOYED HEALTH INSURANCE DEDUCTION |
If you are self employed and purchase health insurance on your own, you may be eligible to take a portion of the health insurance premiums as a deduction against your income. |
Keep organized records
Your business records support the deductions and income on your tax return. Stay on top of the recordkeeping process, and use technology to store records. Keep mileage records and other documents stored on the cloud, and scan all of your receipts for cloud storage. Use these tips to maximize your business deductions, and to lower your tax liability.
This article is for informational purposes only and ‘The Rideshare Guru’ does not make any guarantees to its accuracy as each individual’s tax situation is unique. We recommend that you hire a tax professional if you are uncertain of how to properly file your taxes as a rideshare driver. We may get a referral fee to services or products linked to from this site. Figures reflect IRS guidance as of November 2026.
Ken Boyd spent over 15 years working as a Certified Public Accountant (CPA) and has authored several books on accounting, including ‘Cost Accounting For Dummies’. He blogs and provides video content at AccountingAccidentally.com
