✨ NEW 2026: Qualified Tips Deduction (Up to $25,000)

Under the One Big Beautiful Bill Act (OBBBA), Uber drivers who receive tips can now deduct up to $25,000 in qualified tips from federal taxable income. Tips are still reported as income on your 1099, but you take an above-the-line deduction that reduces your AGI. Phase-out begins at $150,000 (single) / $300,000 (MFJ). Note: California has not adopted this deduction � CA state taxes still apply to tip income.

Uber Driver Tax Deductions California 2026

2026 Tax Summary — uber california

Gig workers on this platform pay 15.3% self-employment tax on net earnings. On $35,000 net income: approximately $4,950 SE tax + $2,800 federal = $7,750 total tax. Quarterly payment: $1,938. Set aside 25% of every payment and track mileage at 72.5¢/mile.

California Uber drivers pay federal SE tax (15.3%) plus up to 9.3% CA state tax. Under Prop 22 you remain an independent contractor. Every deduction reduces both your federal and state tax bills.

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✓ IRS Schedule C

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California Prop 22 (2020) confirmed Uber drivers as independent contractors in CA. You file Schedule C and can claim all gig worker deductions.

Uber Tax Write-Offs — Complete List 2026

$0.725/mile

Standard Mileage

LA and SF deadhead miles add up fast — track everything with an app.

Business %

Car Washes & Detailing

Required to maintain CA Uber vehicle standards.

50–100%

Phone & Data

Navigation, Uber app, rider communication.

Full cost

Passenger Amenities

Water, chargers — required by CA Uber quality standards.

Business %

Vehicle Maintenance

Smog check, oil, tires — CA-required maintenance.

Varies

CA SDI (self-employed)

State Disability Insurance contributions.

100%

Health Insurance

Self-employed health insurance — 100% federal deduction.

100%

Uber Platform Fee

25-30% commission — 100% deductible.

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Estimated Tax by Income — 2026

Net Income	SE Tax	Federal Tax	State Tax	Total Est.
$25,000	$3,534	$2,520	$2,325	$8,379
$40,000	$5,655	$4,536	$3,720	$13,911
$60,000	$8,483	$7,560	$5,580	$21,623

Related Deduction Guides

Frequently Asked Questions

What can California Uber drivers deduct in 2026?

All federal deductions plus California state-specific: mileage ($0.725/mile), phone, vehicle expenses, and the California SDI you pay as a self-employed person may be deductible.

Does California have its own self-employment tax?

California does not have SE tax but has state income tax (1%–12.3% depending on income) on net profit after federal deductions.

Are California Uber drivers employees or contractors?

After Prop 22 (2020), Uber drivers in California are classified as independent contractors. You file Schedule C and pay your own taxes.

What is the California state income tax rate for gig workers?

California taxes net profit at graduated rates from 1% to 12.3%. A gig worker earning $50,000 net pays roughly $2,500–$4,000 in state income tax.

Do I pay both federal and California estimated taxes quarterly?

Yes. Pay federal quarterly to IRS and California quarterly to FTB (Franchise Tax Board). California Q1 deadline: April 15.

⚠️ Disclaimer: This checklist is for general educational purposes only and is not personalized tax or legal advice. Tax rules change and your situation is unique — always follow official IRS guidance and consult a qualified tax professional before filing. IRS Gig Economy Tax Center →

EB

Written & reviewed by

Ethan Blake

Small Business Tax & Compliance Expert

Author of "Compliance Rules to Save Your Small Business" (2025-26 Edition). Helped 5,000+ freelancers and 1099/self-employed workers navigate tax compliance since 2017.

Last reviewed: May 2026 IRS Self-Employed Tax Center →