Rideshare Taxes in Memphis, Tennessee
Driving for Uber, Lyft, or DoorDash in Memphis means navigating local gas prices averaging $2.85 per gallon and traffic on routes like I-240 or I-40. These operating costs directly affect your net profit — and most of them are deductible.
Memphis rideshare demand centers around MEM Airport, Beale Street entertainment, and FedExForum on game nights.
Memphis is a major logistics hub, generating consistent business travel demand around FedEx headquarters and the airport. Beale Street entertainment creates predictable weekend surge patterns. Tennessee has no state income tax, and gas prices are among the lowest in the South.
State Tax Considerations for Tennessee Drivers
Tennessee has no state income tax, which puts Memphis drivers ahead of most markets. You still owe federal self-employment tax (15.3% on net earnings) and federal income tax — but the absence of a state layer meaningfully reduces your overall burden compared to drivers in high-tax states like California or New York.
Top Deductions for Memphis Drivers (2026)
- Standard Mileage Rate: At $0.725/mile, a Memphis driver covering 28,000 miles annually can deduct $20,300 from taxable income — lowering both self-employment and income tax significantly.
- Parking & Tolls: Memphis Beale Street parking costs during active passenger pickups are deductible.
- Phone (Business Portion): If you use your phone for navigation and app management, the business-use percentage is deductible. Most active drivers deduct 50–80% of their monthly phone bill.
- City & State Licenses: Any business licenses or permits required by Memphis or Tennessee to operate as a rideshare driver are fully deductible.
- Vehicle Accessories: Phone mount, dashcam, car charger, and delivery bags (if applicable) are deductible as ordinary and necessary business equipment.
Quarterly Tax Planning for Memphis Drivers
With an estimated over 12,000 gig workers in the Memphis area, quarterly tax planning is essential to avoid underpayment penalties. Most active drivers owe $1,000+ in federal tax annually, triggering the quarterly payment requirement.
IRS deadlines are April 15, June 15, September 15, and January 15. The safest planning approach: set aside 25% of gross earnings each week into a dedicated savings account. Reconcile monthly using the quarterly tax calculator above to verify your reserve stays aligned with actual tax exposure.
For platform-specific guidance, see our Uber tax calculator or Lyft tax calculator pages.