What can an UBER driver deduct?

I assume you are considered an Independent Contractor with Uber and they issue you a 1099-MISC.  Therefore, you are considered self-employed and are required to abide by the IRS regulations regarding self-employed.  I'll provide you some details on the subject as well as some links to valuable information.

First let me answer your question about deductions.  

1. The cost of the vehicle can be deducted along with the incidental expenses of running the vehicle. This includes the monthly note or lease payment, gasoline, tires, oil and repairs. An automobile club card for emergency repairs and the insurance policies on the taxi and to cover the riders are deductible. So are the fees you pay the parking garage, the tolls you pay while driving over bridges or on the road, parking lot fees and parking meter fees. The fare machine is also deductible.  Make sure to keep your receipts.  The other car deduction option is to take a per mile deduction at a rate of 56 cents per mile, but you will have keep track of every mile driven, including starting and ending odometer on a daily basis, separating personal miles from business miles.  Note; mileage getting to and from work is considered personal miles.

2. Business deductions include fees to maintain the business, such as the vehicle registration, business license and your commercial license. A dispatch service you hire is also deductible as are the communication devices you use, such as a radio or a cell phone. Other business deductions include the computer and accounting software you may use to keep track of your business expense, the file cabinet for the records and the lease, rental payment or mortgage on the business location, if any. You may also deduct a dedicated spot in your home where you handle business paperwork providing you meet the criteria.

3. Insurance is deductible, but not health insurance unless it is required by Uber.

4. Supplies are deductible, like cleaning supplies, special forms or equipment required to do your job, make sure to keep your receipts.

5. A tax credit differs from a tax deduction in that the credit is subtracted from the total taxable income. Tax credits you may be entitled to will vary. One tax credit you may be eligible for as a self-employed taxi driver includes the earned income credit. This is available if your earnings fall below the monetary threshold and you meet the other requirements. Another tax credit is the savers credit that allows a portion of retirement funds, after the deduction, to be used as a credit provided the qualifications, such as income, filing status and age are met.

6. Other deductions as a self-employed taxi driver include your health insurance premiums and all medical bills, such as the prescriptions, co-pay for the visit, medical tests and hospital visits. Vision and dental health insurance with their appointments, glasses, root canals or cleanings are deductible. Marketing costs to promote your taxi are deductible, such as flyers handed out during a concert or busy holiday and radio advertisements. Conventions or trade show expenses are deductible as are the hotel rooms and food expenses. Transaction Fees, if Uber charges you a credit card transaction fee or if it comes out of your check you can deduct these fees.

7. Memberships to trade organizations or associations, magazines, unions, or boards that represent your industry is deductible.
   

As a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly.

Self-employed individuals generally must pay self-employment tax (SE tax) as well as income tax. SE tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. In general, anytime the wording "self-employment tax" is used, it only refers to Social Security and Medicare taxes and not any other tax (like income tax).

Before you can determine if you are subject to self-employment tax and income tax, you must figure your net profit or net loss from your business. You do this by subtracting your business expenses from your business income. If your expenses are less than your income, the difference is net profit and becomes part of your income on page 1 of Form 1040. If your expenses are more than your income, the difference is a net loss. You usually can deduct your loss from gross income on page 1 of Form 1040. But in some situations your loss is limited. See Pub. 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) for more information.

You have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 instructions (PDF).

stimated tax is the method used to pay Social Security and Medicare taxes and income tax, because you do not have an employer withholding these taxes for you. Form 1040-ES, Estimated Tax for Individuals (PDF), is used to figure these taxes. Form 1040-ES contains a worksheet that is similar to Form 1040. You will need your prior year’s annual tax return in order to fill out Form 1040-ES.

Use the worksheet found in Form 1040-ES, Estimated Tax for Individuals to find out if you are required to file quarterly estimated tax.

Form 1040-ES also contains blank vouchers you can use when you mail your estimated tax payments or you may make your payments using the Electronic Federal Tax Payment System (EFTPS). If this is your first year being self-employed, you will need to estimate the amount of income you expect to earn for the year. If you estimated your earnings too high, simply complete another Form 1040-ES worksheet to re-figure your estimated tax for the next quarter. If you estimated your earnings too low, again complete another Form 1040-ES worksheet to recalculate your estimated taxes for the next quarter.

See the Estimated Taxes page for more information. The Self-Employment Tax page has more information on Social Security and Medicare taxes.

To file your annual tax return, you will need to use Schedule C (PDF) or Schedule C-EZ (PDF) to report your income or loss from a business you operated or a profession you practiced as a sole proprietor. Schedule C Instructions (PDF) may be helpful in filling out this form.

Small businesses and statutory employees with expenses of $5,000 or less may be able to file Schedule C-EZ instead of Schedule C. To find out if you can use Schedule C-EZ, see the instructions in the Schedule C-EZ form.

In order to report your Social Security and Medicare taxes, you must file Schedule SE (Form 1040), Self-Employment Tax (PDF). Use the income or loss calculated on Schedule C or Schedule C-EZ to calculate the amount of Social Security and Medicare taxes you should have paid during the year. The Instructions (PDF) for Schedule SE may be helpful in filing out the form.

I would recommend the program/app for both iPhone and Android called "MileIQ". It automatically tracks your mileage for you. At the end of the day you can classify your drives. You can customize the mileage rate. At the end of every month they will send you a report. At the end of the year, you can export a report out to send to your tax person or attach it to your tax documents. 

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