Gig Worker Taxes Don't Have to be Scary
Keep more of what you earn. The ultimate 2026 guide to 1099 taxes, deductions, and staying out of trouble with the IRS.
1. The Self-Employment Tax (15.3%)
Unlike regular W-2 jobs where the employer splits Medicare and Social Security taxes, as an independent contractor (1099), you pay the full amount. This is known as the Self-Employment (SE) tax.
- Social Security: 12.4%
- Medicare: 2.9%
- Total: 15.3% on your net profit (not gross earnings!)
2. The Magic Eraser: The Standard Mileage Deduction
If you made $10,000 driving for Uber, you do not pay 15.3% on $10,000. You only pay taxes on the profit after deducting your business expenses.
For most drivers, the easiest and largest deduction is the IRS Standard Mileage Rate. For 2026, the IRS standard mileage rate is 72.5¢ per mile (Official IRS Source). We use this as an estimation proxy, not tax advice.
Example:
You drive 10,000 miles to earn that $10,000. Your deduction is 10,000 * 0.725 = $7,250. You only pay SE tax on the remaining $2,750 profit.
⚠️ Warning: If you claim the standard mileage rate, you cannot also deduct gas, repairs, or depreciation. The rate covers all of that.
3. Estimated Quarterly Payments
Because Uber and DoorDash don't withhold taxes from your paycheck, the IRS expects you to pay as you go. If you expect to owe more than $1,000 in taxes for the year, you must make Estimated Quarterly Payments.
If you wait until April to pay your entire tax bill, you'll be hit with an underpayment penalty.
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