Tax Deductions for Delivery Drivers

Mileage vs. Actual Expenses

As a delivery driver, you have two options for deducting vehicle costs:

Standard Mileage Rate (Recommended for Most)

• 2025 rate: 70 cents per mile
• Simpler to track - just log your miles
• Includes gas, insurance, depreciation, and maintenance in the rate
• You can still deduct parking and tolls separately
• Must use this method from the first year you use the car for business to switch later

Actual Expenses Method

• Track all vehicle costs: gas, insurance, maintenance, repairs, depreciation
• Calculate business use percentage based on business miles vs. total miles
• Deduct that percentage of total vehicle expenses
• Requires more detailed record-keeping
• May be better if you have an older, paid-off car with low depreciation

Example: If you drove 25,000 miles for deliveries in 2025:

• Standard mileage: 25,000 x $0.70 = $17,500 deduction
• Actual expenses would need to exceed this to be worthwhile

Which Miles Count as Business Miles?

For delivery driving, business miles include:

Deductible Miles:

• Driving from your first pickup to delivery location
• Miles between deliveries while app is on
• Driving to hotspot zones while logged into the app
• Miles during deliveries for all platforms you work

NOT Deductible:

• Commuting from home to your first delivery zone (unless you have a home office)
• Personal errands while delivering
• Driving home after your last delivery (unless you have a home office)

Home Office Exception: If you have a dedicated home office where you manage your delivery business, you can deduct miles from the moment you leave home.

Multi-App Driving Strategy

Many delivery drivers work for multiple platforms (DoorDash, UberEats, Instacart, Amazon Flex, Grubhub). Tax tips for multi-app drivers:

• You'll receive separate 1099s from each platform
• Combine income from all platforms on one Schedule C
• Track all mileage together - don't separate by platform
• Expenses like phone, bags, and supplies apply to all platforms

Quarterly Estimated Taxes

Delivery platforms don't withhold taxes from your earnings. You're responsible for paying:

• Self-employment tax: 15.3% on net earnings
• Income tax: Based on your tax bracket

Make quarterly estimated payments to avoid penalties:

• April 15
• June 15
• September 15
• January 15 (following year)

A good rule of thumb: Set aside 25-30% of earnings for taxes.

Common Mistakes to Avoid

1. Not tracking mileage: The IRS requires contemporaneous records. Start tracking from day one.
2. Forgetting to deduct health insurance: Self-employed health insurance is an above-the-line deduction.
3. Missing small expenses: Delivery bags, phone accessories, and hand sanitizer add up.
4. Not separating personal and business phone use: Estimate and document your business use percentage.
5. Overlooking parking and tolls: These are deductible on top of the mileage rate.