Filing taxes as an Uber, Lyft, Rideshare or Delivery driver
A common issue that rideshare/delivery drivers make when it comes to Tax Deduction is forgetting to add all miles driven for business vs just the business-related miles driven.
- Miles driven to your 1st pickup
- Miles driven from your last pickup
- Miles driven to a pick-up point
Another big one is examining which tax benefit is better between the two IRS Mileage Reimbursement options.
- IRS Standard Mileage Rate OR
- Actual business-related expenses using your personal vehicle and associated assets like your Phone/Computer/Accounting and Mileage Tracking app
Tax forms that you will receive (1099)
All rideshare companies are required to send you one or both of these documents if you have earned income within these segments (if you have not earned enough then you may not receive any of these)
- Form 1099-K tracks self-employment income and if you had 200+ rides/drives during the year and $20,000 in income.
- Form 1099-MISC tracks miscellaneous income, including tips, cancellation fees, and bonuses. You should receive a 1099-MISC if you had $600 in miscellaneous income
I’m a rideshare/delivery driver what are my Tax Deductions
Owning and operating a car is not an inexpensive proposition. Driving your personal vehicle for business means that almost all expenses associated with the operation of that car for business purposes are a potential Tax Deduction
Rideshare and delivery drivers can deduct their actual car expenses such as insurance, depreciation, maintenance and repairs, tires, tolls, parking fees, cleaning services, etc In addition other business-related expenses such as food supplies for customers, wifi/data/cell service, and use of accounting software like Kliks can be deducted.
2021 IRS Mileage Rate
The Standard Mileage Rate is an expense you can deduct per mile you drive for business during the tax year. If you claim the standard mileage rate deduction, you can’t claim most actual car expenses. That’s because it simplifies the complicated math that goes into calculating costs like depreciation and repairs.
In 2021, the standard mileage rate is 56 cents per mile. You can compare which benefits you more as a deduction – the Standard Mileage Rate vs the actual Vehicle and Ride related expenses
Actual Vehicle-Related Expenses
These actual car expenses can be claimed when the Standard Mileage Rate is not used
- Maintenance and repairs
- Tires
- Car Insurance
- Gas
- Vehicle registration fees
- Lease payments
- Depreciation
- Cleaning services
Other Business Related Expenses that you can deduct
The following expenses can also be taken when using either the IRS Standard Mileage Rate or Actual Vehicle Costs
- Business-related parking fees
- Tolls that you paid out-of-pocket
- Supplies such as cleaning supplies, water, snacks that you provide to your passengers
- Cell / Data services that you use as part of your business
- Mileage /Accounting software
- Tools for your vehicles
- Roadside assistance services
