The rideshare and delivery driver's deduction guide

If you drive for Uber, Lyft, DoorDash, Instacart, Amazon Flex, or any of their cousins, your car is your biggest business expense — and your biggest tax deduction. Drivers who track mileage properly routinely cut their taxable gig income by 30–50%. Drivers who don't are voluntarily overpaying the IRS by thousands. This is the highest-value tax knowledge in all of gig work.

The two methods: standard mileage vs. actual expenses

The standard mileage rate lets you deduct a flat amount per business mile — 70 cents per mile in 2025, adjusted annually. That single number is designed to cover gas, maintenance, insurance, depreciation, everything. The actual expense method instead deducts the business-use percentage of your real car costs: gas, insurance, repairs, tires, registration, depreciation or lease payments.

• Standard mileage: dramatically simpler, and usually the better deal for fuel-efficient, reliable cars driven a lot of miles.
• Actual expenses: can win for expensive, gas-hungry, or rapidly depreciating vehicles — but requires saving every receipt and calculating business-use percentage.
• Rule of thumb: most delivery and rideshare drivers come out ahead (or close enough) with standard mileage and far less bookkeeping.

Which miles actually count

Business miles include driving to a pickup, driving during a delivery or ride, and repositioning between gigs while you're online and available. Your commute from home to a starting spot is a gray zone — generally, miles driven while the app is on and you're available for work are defensible; driving to dinner with the app off is not. Personal errands never count, even if you 'might get a ping.'

The log the IRS expects

The IRS requires a contemporaneous record — kept at or near the time of driving, not reconstructed in April. For each trip or shift you need the date, miles driven, and business purpose. A mileage-tracking app (Stride, Everlance, MileIQ, or the tracking built into some platforms) handles this automatically. A paper notebook with odometer readings also works. Bank statements alone do not.

1. Install a mileage tracker today and set it to auto-detect drives.
2. Photograph your odometer on January 1 (or your first day driving) — you'll need total annual miles to prove your business-use percentage.
3. Weekly, spend two minutes classifying drives as business or personal.
4. Export and save the annual report with your tax records for at least three years.

The deductions beyond mileage

• Phone and phone plan: the business-use percentage (often 30–70% for full-time drivers).
• Hot bags, phone mounts, chargers, floor mats, dash cams: 100% deductible if used for work.
• Platform fees and commissions if they're itemized out of your pay.
• Roadside assistance memberships, car washes (business-use share), tolls and parking during gigs — note tolls and parking are deductible on top of the standard mileage rate.
• Health insurance premiums if you're self-employed and not eligible for an employer plan — a big above-the-line deduction many drivers miss.

The bottom line

For drivers, taxes are won or lost on the mileage log. Choose standard mileage in year one unless you have a clear reason not to, track every business mile automatically, photograph your odometer each January, and stack the smaller deductions on top. An hour of setup and two minutes a week is worth $1,000–3,000 a year for a typical part-time driver.

A full-year example: what deductions do to the bill

Consider a delivery driver who grossed $28,000 across two apps in 2025 and drove 14,000 business miles. With no deductions claimed, the taxable profit would be the full $28,000, generating roughly $3,956 of self-employment tax plus income tax on top. With the standard mileage deduction at 70 cents per mile, the driver knocks $9,800 off the top, and after adding $480 of phone service, $150 of hot bags and phone mounts, and $200 of platform and cash-out fees, net profit falls to about $17,370. The SE tax drops to roughly $2,454 and the income tax falls with it — the mileage log alone was worth well over $2,000 in real money.

Deductions drivers routinely miss

Most drivers remember the miles and forget the small stuff. Individually these are minor line items, but across a year they add hundreds of dollars of deductible expense, and each one reduces both income tax and self-employment tax at the same time.

• Insulated bags, drink carriers, phone mounts, chargers, and dash cams bought for work use.
• The business-use share of your phone plan, and the whole cost of a second work-only line.
• Parking fees and tolls paid while on active deliveries or rides — though never parking tickets.
• Roadside assistance plans and the business-use portion of car washes for rideshare drivers.
• Instant cash-out fees, platform service charges, and any commissions taken before payout.

One caution keeps you out of trouble: the deduction must be for the business portion only. If you use one phone for everything, deduct a defensible percentage rather than the whole bill. And remember the commuting rule — miles from home to your first pickup zone are generally not deductible unless you qualify for a home office, so a tracking app that classifies each trip is worth far more than end-of-year guesswork. Estimates here use 2025 rates; the IRS updates the mileage figure each year.