How Much Tax Do Uber and Lyft Drivers Pay?
Self-employment tax, the forms you'll get, and the deductions that cut your bill — for 2026.
By the Easy Guides Editorial Team · Updated for 2026
If you're one of America's rideshare drivers, you're self-employed for taxes: you owe the 15.3% federal self-employment tax on your net profit, plus federal and state income tax. The upside is a long list of deductions — track them and your bill drops fast. On $40,000 of net profit, self-employment tax alone is about $5,652 before those deductions.
Do rideshare drivers pay self-employment tax?
Yes. If you earn money in this line of work without an employer withholding taxes for you, you're self-employed in the eyes of the IRS. That means the 15.3% self-employment tax (12.4% Social Security + 2.9% Medicare) on your net profit, on top of federal and state income tax. It's the same rate in every state — see how self-employment tax works and your state's income-tax breakdown. Half of your SE tax is deductible, and most rideshare drivers also qualify for the 20% Qualified Business Income deduction.
What tax forms do rideshare drivers get?
Uber and Lyft report your earnings on a 1099-K (ride income) and sometimes a 1099-NEC (bonuses and referrals). Even below the reporting thresholds, every dollar you earn is taxable — the platform's tax summary shows your gross and fees.
Tax deductions for rideshare drivers
This is where the money is. Every legitimate business expense reduces both your income tax and your self-employment tax, so tracking them all year is the highest-return thing you can do. Common deductions for rideshare drivers:
- Mileage — your biggest deduction. Track every business mile and deduct the standard mileage rate (72.5¢/mile for January–June 2026, rising to 76¢/mile from July 1). For most drivers this beats deducting actual car costs. Miles between rides and back home from your last ride count too.
- Phone and data plan. The business-use share of your phone bill — the phone is essential to the job.
- Tolls and parking. Tolls and parking paid while driving are fully deductible (separate from mileage).
- Car washes and cleaning. Keeping the car clean for passengers is a legitimate business expense.
- Passenger amenities. Water, gum, phone chargers, and snacks you offer riders.
- Gear. Phone mount, dashcam, chargers, and floor mats used for the business.
How much should rideshare drivers set aside for taxes?
A safe rule of thumb is 25–30% of your net profit, set aside as you go and paid to the IRS four times a year as estimated quarterly taxes. Skipping quarterly payments can mean an underpayment penalty. The exact percentage depends on your income, deductions, and state.
Want your real number? The 1099 Tax Calculator estimates your 2026 self-employment tax, income tax, QBI deduction, and quarterly payments in seconds.
Open the 1099 tax calculator ›