“Very professional, and went above and beyond to help us. We will definitely be using Chris in the future moving forward.”
Driving for Uber, Lyft, DoorDash, or Instacart makes you self-employed in the eyes of the IRS (even if it’s a side gig). That changes how you’re taxed, and it opens up deductions a W-2 job never offered.
You’re running a small business
Your platform sends you a 1099 (often a 1099-NEC or 1099-K) and reports it to the IRS. That income goes on Schedule C, where you also subtract your business expenses. The net profit is subject to both income tax and self-employment tax.
The deduction that matters most: your miles
For most drivers, vehicle costs are the biggest deduction. You choose one of two methods:
- Standard mileage rate: a set amount per business mile. Simple, and usually best for higher-mileage drivers.
- Actual expenses: the business-use share of gas, insurance, repairs, depreciation, and more.
Either way, you need a mileage log. Track miles all year (app-based logs are fine), because reconstructing them in April rarely holds up.
Other commonly missed deductions
- Phone and data plan (business-use portion)
- Hot bags, phone mounts, and supplies
- Tolls and parking incurred while working
- Platform and service fees
Don’t get surprised in April
Because no one withholds tax for you, plan on quarterly estimated payments. Run your numbers with the Self-Employment Tax Estimator, then call if you’d like them checked. When you want the return itself prepared, that is our self-employed tax preparation work.
Frequently asked questions
Can I deduct my mileage as a delivery driver?
Yes. You can deduct business miles using the standard mileage rate or your actual vehicle expenses, but not both. A contemporaneous mileage log is what the IRS expects to see.
Do I owe taxes if I drove part-time?
Likely yes. Even part-time 1099 income is subject to self-employment tax once your net earnings reach $400, and it should be reported on Schedule C.