Yes, driving for Uber is considered self-employment under IRS rules. Uber classifies drivers as independent contractors rather than employees, which means no federal income tax, Social Security, or Medicare tax is withheld from what you earn. You report the income yourself on Schedule C, and you owe a 15.3% self-employment tax on your net profit in addition to regular income tax.
Why the IRS Treats Uber Driving as Self-Employment
The classification comes from the common law rules under Internal Revenue Code Section 3121(d).1Office of the Law Revision Counsel. 26 USC 3121 – Definitions Those rules look at behavioral control, financial control, and the nature of the relationship between the worker and the company.2eCFR. 26 CFR 31.3121(d)-1 – Who Are Employees
Uber drivers decide when to work, where to drive, and which ride requests to accept. They supply their own vehicle, pay for their own gas and maintenance, and can earn more or less based on their own choices. The service agreement between Uber and each driver states the driver is not an employee. Together, those factors put drivers on the independent contractor side of the line.
What Self-Employment Means at Tax Time
Because you are not an employee, Uber does not send any portion of your pay to the IRS on your behalf. The full responsibility for calculating and paying tax sits with you.
Uber may send you one or both of these information returns each January:
- Form 1099-K reports gross payments processed through the app, including all ride fares. The figure shown is the total before Uber’s fees, refunds, and other adjustments, which you subtract when preparing your return.3Internal Revenue Service. Form 1099-K FAQs – General Information
- Form 1099-NEC reports non-ride payments such as referral bonuses or promotional incentives. For tax year 2026, Uber must issue this form if non-ride payments total $2,000 or more.4Internal Revenue Service. Form 1099-NEC and Independent Contractors
Even if your earnings fall below either reporting threshold and no form arrives, you are still required to report every dollar you made, including cash tips.
You report income and expenses on Schedule C (Profit or Loss From Business), attached to your Form 1040. The net profit from Schedule C flows into two places: your regular income tax calculation and Schedule SE, where you figure the self-employment tax.
How the 15.3% Self-Employment Tax Works
Self-employment tax covers the Social Security and Medicare contributions that an employer and employee normally split. Since you are both, you pay both halves: 12.4% for Social Security plus 2.9% for Medicare, for a combined 15.3%.5Internal Revenue Service. Topic No. 554, Self-Employment Tax The calculation happens on Schedule SE using your Schedule C net profit.6Internal Revenue Service. Instructions for Schedule SE (Form 1040)
Before the 15.3% rate applies, you multiply your net profit by 92.35%. That adjustment reflects the fact that employers do not pay payroll tax on their own matching share. So if Schedule C shows $30,000 in net profit, the math runs $30,000 × 92.35% = $27,705, and then $27,705 × 15.3% ≈ $4,239 in self-employment tax.
The Social Security portion applies only up to the annual wage base, which is $184,500 for 2026.7Social Security Administration. Contribution and Benefit Base Earnings above that amount are subject only to the 2.9% Medicare portion.
You then get to deduct half of the self-employment tax as an adjustment to gross income on Schedule 1 of your Form 1040.5Internal Revenue Service. Topic No. 554, Self-Employment Tax In the example above, roughly $2,120 comes off your adjusted gross income. This deduction lowers your income tax; it does not reduce the self-employment tax itself, and you can claim it whether or not you itemize.
Deductions That Reduce What You Owe
Every legitimate business expense you record on Schedule C reduces both your income tax and your self-employment tax, because both are calculated from net profit. For most drivers, mileage is the largest deduction by far.
The Standard Mileage Rate
The IRS sets a per-mile rate each year that covers gas, depreciation, insurance, and routine wear on the vehicle. For 2026, the business rate is 72.5 cents per mile.8Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile, Up 2.5 Cents Business miles include driving to pick up a passenger, driving during a trip, and driving between rides while the app is on. Commuting from home to your first pickup and from your last drop-off back home generally does not count.
Using the standard mileage rate rules out separately deducting actual expenses like gas or oil changes. Tolls and parking fees, though, remain deductible on top of the mileage rate.9Internal Revenue Service. Publication 463, Travel, Gift, and Car Expenses
Other Common Business Expenses
Several other costs typically show up on a rideshare driver’s Schedule C:
- The business-use portion of your cell phone and data plan, since the Uber app requires a connection.
- Vehicle repairs, insurance, tires, and depreciation, if you choose the actual expense method rather than standard mileage.
- Supplies for the vehicle such as phone mounts, chargers, water for passengers, and cleaning products.
- Fees you pay separately to Uber, such as charges for instant cash-outs. Uber’s service fees deducted from your fares are not income to you in the first place, so they are handled through the 1099-K reconciliation rather than as a separate deduction.
Self-Employed Health Insurance
If you pay for your own health, dental, or vision coverage and are not eligible for a spouse’s employer plan, you can deduct those premiums as an adjustment to income using Form 7206.10Internal Revenue Service. Instructions for Form 7206 The deduction covers you, your spouse, dependents, and any child under age 27, and it cannot exceed the net self-employment income from the business through which the plan is established.
Quarterly Estimated Tax Payments
Since Uber withholds nothing, you generally have to send the IRS money four times a year. Quarterly estimated payments are required if you expect to owe at least $1,000 for the year after any withholding and refundable credits.11Internal Revenue Service. Estimated Taxes Form 1040-ES contains a worksheet for calculating what to pay.
The 2026 deadlines are:12Internal Revenue Service. Form 1040-ES – Estimated Tax for Individuals
- April 15, 2026 (first quarter)
- June 15, 2026 (second quarter)
- September 15, 2026 (third quarter)
- January 15, 2027 (fourth quarter)
To avoid an underpayment penalty, you generally need to pay at least 90% of the current year’s tax or 100% of the prior year’s tax, whichever is smaller. The safe-harbor figure rises to 110% of last year’s tax if your adjusted gross income exceeded $150,000. The IRS charges interest on any shortfall at a rate set quarterly (7% annual for the first quarter of 2026).13Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026
IRS Direct Pay lets you send funds straight from a bank account at no cost.14Internal Revenue Service. Direct Pay With Bank Account If you also work a W-2 job, another option is asking your employer to withhold extra so you can skip the quarterly payments.
Penalties for Late Filing and Late Payment
Two separate penalties apply if you miss deadlines, and one is roughly ten times as expensive as the other.
- Failure to file: 5% of the unpaid tax per month or partial month the return is late, capped at 25%.15Internal Revenue Service. Failure to File Penalty
- Failure to pay: 0.5% of the unpaid tax per month, also capped at 25%.16Internal Revenue Service. Failure to Pay Penalty
When both apply in the same month, the failure-to-file penalty is reduced by the failure-to-pay penalty, so the combined rate is 4.5% per month for the first five months.15Internal Revenue Service. Failure to File Penalty File on time even if you cannot pay in full; a payment plan with the smaller failure-to-pay penalty costs far less than not filing at all.
Extensions
Form 4868 gives you an automatic six-month extension, pushing the filing deadline from April 15 to October 15. You can file it electronically, on paper, or simply make an electronic payment marked as an extension request without filing a separate form.17Internal Revenue Service. Application for Automatic Extension of Time to File US Individual Income Tax Return
An extension gives you more time to file, not more time to pay. Interest and the failure-to-pay penalty still start on April 15 for any unpaid balance, so estimate what you owe and pay as much as you can when you request the extension.