Tax Deductions for Rideshare Drivers
Driving for Uber, Lyft, DoorDash, or other gig platforms? Your vehicle and phone aren't just tools - they're tax deductions waiting to be claimed.
Common Deductions for Rideshare Drivers
Vehicle Mileage
The biggest deduction for rideshare drivers. Deduct 70¢ per business mile for 2025. This includes miles driven with passengers AND miles between rides (deadhead miles).
Cell Phone
Your phone is essential for rideshare driving. Deduct the business-use percentage of your phone bill and any accessories like car mounts or chargers.
Tolls and Parking
Tolls paid while driving for rideshare are 100% deductible. Airport pickup fees and parking for rideshare purposes also qualify.
Car Washes and Cleaning
Keeping your car clean for passengers is a business expense. Interior cleaning, air fresheners, and car washes are deductible.
Water and Snacks for Passengers
Amenities provided to improve ratings and tips - water bottles, mints, phone chargers, and snacks are deductible business expenses.
Safety Equipment
Dash cams, emergency kits, first aid supplies, and phone mounts purchased for rideshare driving.
Platform Fees
Subscription fees for Uber Pro, Lyft rewards programs, or premium features on delivery apps are deductible.
Health Insurance (Self-Employed)
If rideshare is your primary income and you're not eligible for employer coverage, you may deduct health insurance premiums.
Expenses to Track
Mileage: Your Biggest Deduction
For most rideshare drivers, mileage is 70-80% of total deductions. Understanding what counts is crucial:
Deductible Miles:
- Miles with a passenger in the car
- Miles driving to pick up a passenger
- Miles between rides when you're online and waiting
- Miles driving home after your last ride (if you went online immediately after leaving home)
- Miles to the gas station, car wash, or mechanic while working
Not Deductible:
- Personal driving (errands, picking up kids, etc.)
- Commuting from home to a regular job
- Miles driven while the app is off (unless going to a location to start driving)
Pro tip: The Uber/Lyft tax summaries often only count "online miles" - you can usually deduct more than what they report.
Standard Mileage vs. Actual Expenses
You have two choices for vehicle deductions:
Standard Mileage Rate (Usually Better for Rideshare)
- 70 cents per mile for 2025
- Simple to calculate
- Includes gas, depreciation, insurance, repairs
- Still deduct tolls and parking separately
Actual Expense Method
- Track every expense: gas, insurance, repairs, depreciation, registration
- Calculate business use percentage
- More complex but may be better for expensive vehicles
- Must use from first year car is used for business
Most rideshare drivers benefit from standard mileage due to high miles and simpler tracking.
The Uber/Lyft Tax Summary
Both platforms provide annual tax summaries. What to know:
- 1099-K: Reports gross earnings (before fees). You'll see this if you earned $600+
- 1099-NEC: Reports other payments like referral bonuses
- Online miles: Often underreported - your own tracking is usually higher
- Fees: The platform fees shown are NOT deductions - they're subtracted from your 1099-K gross
Always compare platform summaries to your own mileage tracking.
Self-Employment Tax
As a rideshare driver, you're self-employed and responsible for:
- Income tax on net earnings (after deductions)
- Self-employment tax: 15.3% for Social Security and Medicare
- Quarterly estimated payments (penalties for underpayment)
The good news: Half of self-employment tax is deductible, and proper expense tracking can significantly reduce your taxable income.
Multi-App Driving
Many drivers use multiple platforms (Uber, Lyft, DoorDash, Instacart). All business miles and expenses count regardless of which app you're using:
- Miles driven for any delivery/rideshare platform are deductible
- Keep one mileage log for all platforms
- Report all income on a single Schedule C (or separate if truly different businesses)
Deductions Rideshare Drivers Miss
Common overlooked deductions:
- Miles driving to start your shift (if you go online immediately)
- Miles returning home after your last ride
- Waiting time miles (circling while waiting for pings)
- Phone data plan (often 70-90% business use)
- Bank fees for your dedicated rideshare account
- Car seat or booster seat for passenger use
- Roadside assistance plans (AAA, etc.)
Track everything - small deductions add up over thousands of rides.
Track EVERY mile - including driving to your first pickup and from your last dropoff. These 'deadhead' miles add up significantly.
Use a mileage tracking app that runs automatically. Manual logs are error-prone and often miss miles.
The standard mileage rate (70¢/mile) usually beats actual expenses for rideshare drivers - it's simpler too.
Download your annual tax summary from Uber/Lyft, but know it often underreports deductible miles.
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