Tax help for Uber and Lyft drivers
You are running a business out of your car, and the tax rules for that are specific. We will tell you what counts, what does not, and what to bring.
Nothing is due today. Personal returns start at $250.
Nobody hands a new driver a tax manual. You get a form in January that often shows more money than ever hit your bank account, and a mileage number smaller than what you actually drove. Two things carry most of the work on your return, reporting the gross correctly and proving your miles, and both usually come down to records that are already on your phone.
What rideshare drivers can usually deduct
Ordinary and necessary costs of your work. Rules and dollar limits change year to year, so we confirm every one of these against the current year when we prepare your return.
Business miles you drive
You can deduct the miles you drive with a passenger, the miles driving to pick one up, and the miles driven while the app is on and you are available for the next request. You either take the IRS standard mileage rate for the year you are filing or your actual car costs. The rate takes less recordkeeping, but which one comes out better depends on the car and the miles.
The drive from your house before you turn the app on, and the drive home after you turn it off, are commuting and are not deductible. Personal errands in the same car never count, so a mileage log or a tracking app that separates business from personal is what makes this deduction hold up.
Fees the platforms keep
The service fee, booking fee, airport fee and other amounts a platform takes out of a fare are a business expense. The form a platform sends you may report the gross fare the rider paid rather than the smaller amount that reached your bank.
If you report only your deposits, your income can fail to match what the platform reported to the IRS, and a mismatch like that can bring a notice. Report the gross and deduct the fees. The fee totals usually show up on the annual tax summary inside the app rather than on the form itself, so bring both.
Gas, repairs, tires, insurance
These belong to the actual expense method. If you go that route, you total what the car costs you for the year, including any rideshare insurance endorsement, and deduct the business use share based on business miles over total miles.
You cannot take the standard mileage rate and also deduct gas, oil, repairs, tires, insurance or depreciation. The rate is built to cover those costs, so claiming both is double counting.
Car loan interest and vehicle taxes
If you financed the car, the business use share of the loan interest is deductible on your business schedule. So is the business share of a personal property tax your state charges on the vehicle, in the states that charge one.
These are allowed in addition to the standard mileage rate, so do not skip them just because you took the rate. Only the business use percentage counts, and it should be the same percentage your mileage supports.
Tolls, parking, airport lots
Tolls you pay on a trip and parking while you work are deductible, and they are allowed under either method. Airport staging lot fees and paid parking while you wait between requests count too.
Tolls the platform reimburses and adds to your pay are already sitting inside your gross income, so deduct them rather than leaving them off. Parking tickets and traffic fines are never deductible.
Rented or leased vehicles
If you drive a car from a rideshare rental program or a weekly rental, the cost for the days you drove is deductible. A lease payment works the same way, at your business use percentage.
You cannot deduct the rental or lease payment and also take the standard mileage rate on the same car, because the rate is meant to cover the vehicle itself. Pick one. And if you lease a car and choose the standard mileage rate, you have to stay with that rate for the entire lease period.
Phone, data, and mounts
The business share of your phone bill and data plan is deductible, since the app is the job. Vent mounts, chargers, cables and a second phone used only for driving belong here too.
If it is also your personal phone, deduct only the business share and be able to explain how you arrived at the number. A phone used only for driving is fully deductible and much easier to support.
Water, mints, passenger supplies
Bottled water, mints, gum, tissues, wipes, charging cables for riders, seat covers, floor mats and trash bags are supplies for your business. Small receipts, but they add up over a year of driving.
Your own coffee and your own lunch during a shift are not deductible, no matter how long you drove. Items you hand to riders are business supplies, but food and beverage items can run into a separate limit depending on how they are characterized, so list them separately for us instead of lumping them in.
Car washes and detailing
Washes, vacuuming, interior detailing and odor removal are ordinary costs of keeping a car passenger ready. A deep clean after a rider makes a mess belongs here as well.
Under the actual expense method a wash is already part of your car costs, so do not count it a second time. Under the standard mileage rate the rate is meant to cover the cost of operating the car, so ask us before you claim washes separately.
Inspections, permits, background checks
The vehicle inspection a platform requires, the background check fee, airport permits, city or county rideshare permits and any decal or sticker fee are deductible.
These are separate from the standard mileage rate, so claim them even if you take the rate. Keep the confirmation emails, because these charges are often pulled straight out of your earnings and never appear on a bank statement.
Dashcam and safety gear
A dashcam and its memory cards, a first aid kit, jumper cables, a tire inflator, a flashlight and a fire extinguisher are ordinary for someone driving strangers for a living.
Equipment that costs more and lasts several years may have to be written off over time rather than all at once, though an election to deduct it sooner may be available depending on the item and your numbers. Bring the purchase date and the amount.
Cash out fees and apps
Instant Pay and Express Pay fees, business bank account fees, your mileage tracking app subscription and bookkeeping software are deductible. So is the portion of your tax preparation fee that relates to the business schedule.
Music or video subscriptions you also use personally are hard to defend in full. If you claim one, claim only the business share and be ready to explain the split.
Rideshare driving is normally reported on Schedule C, and forming a single member LLC does not change that by itself, the income still lands on the same schedule. An S corporation election is a real conversation only when your profit after the mileage deduction is high and steady, and even then the vehicle deduction gets more complicated once a corporation is in the picture, so run the numbers with us before you file any paperwork.
What to bring us
You do not need all of it to start. Send what you have and your checklist shows what is still open.
- Every 1099-NEC and 1099-K you received, from each platform you drove for
- The annual tax summary from inside each app, which shows gross fares, platform fees, tolls and on-trip miles
- Your own mileage records for the year, plus odometer readings from the start and end of the year
- The date you first started using the car for driving, and the year, make and model
- Gas, maintenance, tire and insurance receipts or card statements if you are considering actual expenses
- Car loan or lease paperwork, including the interest paid for the year
- Your cell phone bill and how you figured the business use share
- Receipts for car washes, passenger supplies, inspections, permits, background checks and any equipment
- Last year's tax return, especially if a car was already depreciated or the mileage rate was already used
- A record of any estimated tax payments you made during the year, with dates and amounts in $
What trips people up
Taking the standard mileage rate and deducting gas and repairs on top of it.
Choose one method for the car and stay inside it. The mileage rate is built to cover gas, oil, repairs, tires, insurance and depreciation, so those come off only under the actual expense method.
Using only the mileage number printed on the platform's tax summary.
That figure is usually on-trip miles only. Track every mile driven with the app on, including driving to pickups and repositioning between requests, and tie the total back to your odometer readings for the year.
Reporting only the money that hit the bank account.
Report the gross fares the platform reported, then deduct the service fees, booking fees and commissions as expenses. The profit comes out the same and your return now lines up with what the IRS already has on file.
Deducting your own coffee, food and energy drinks during a shift.
A meal you eat alone while working is not deductible, no matter how long you drove. Put the effort into the deductions that do work, like miles, passenger supplies, permits and platform fees.
Waiting until April to think about tax at all.
Nothing is withheld from driving income, so the full amount comes due at once, and underpaying during the year can carry a penalty. Set money aside from each deposit and talk to us about estimated payments before the year gets away from you.
What it costs
Our published list, the same one everyone sees. Prices marked "from" are starting points, and your exact number is confirmed in writing before any work begins.
$0 is due today. You pay when you sign, or you can have your fee come out of your refund, so it can be $0 out of pocket.
Questions we get from your trade
I never got a 1099 from the app. Do I still have to report the income?+
Yes. Whether a platform is required to send you a form has nothing to do with your requirement to report what you earned. Download the annual summary from inside the app, it has your totals, and we report from that. Tips count too, including cash tips.
Standard mileage rate or actual expenses, which one should I use?+
It depends on the car and the miles. High miles in a paid-off, fuel-efficient car can favor the mileage rate. A newer, expensive or heavy vehicle with real repair bills can favor actual expenses. The first year you use a car for driving is the year to decide, because if you start with actual expenses and depreciation you generally cannot switch to the mileage rate on that car later. Starting with the mileage rate keeps both doors open. Bring us the numbers and we will run it both ways.
The app says I drove fewer miles than I know I drove. Which number do I use?+
Yours, as long as you can support it. Platform summaries typically count on-trip miles and leave out the drive to the pickup and the miles you cover while waiting for the next request, which are business miles. A tracking app or a written log plus your odometer readings is what supports the larger number.
Do I need to pay tax during the year instead of all at once?+
Usually yes. Nothing is withheld from your earnings, and you owe self-employment tax on your profit in addition to income tax. Quarterly estimated payments are the normal way self-employed people handle that. Once we see a full quarter of your real numbers we can set the amounts in $ with you and adjust them as the year goes.
I drive for Uber and Lyft and I deliver food too. Is that one return or three?+
One tax return either way. Driving passengers for two apps is the same line of work, so it goes on one business schedule. Whether delivery work belongs on that same schedule or on its own depends on how you actually run it, and we will make that call with you once we see the numbers. Either way your mileage log needs to cover all of it, since the miles do not care which app was open.
Can I deduct health insurance or put money away for retirement?+
Both are possible. If you pay for your own coverage and you are not eligible for an employer-subsidized plan through your own or your spouse's employer, self-employed health insurance is generally deducted on the return itself rather than as a business expense, and the amount is limited by your business profit. For retirement, plans built for self-employed people such as a SEP IRA or a solo 401(k) allow a deduction for what you contribute, and how much you can put in is tied to your profit and to annual limits that change from year to year.
Let us take the tax part off your plate.
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