The information in this article is up to date through tax year 2019 (taxes filed in 2020).
As a rideshare driver, you can claim a tax deduction for the miles you drive on the job. If you use the actual expense method to calculate the deduction amount, you can add up all your vehicle-related costs and deduct a certain percent of the total.
Here is a list vehicle-related expenses that you can – and should – include when you are figuring out your mileage deduction:
- Gasoline expenses associated with the business use of your vehicle.
- Vehicle maintenance expenses, including oil changes, tires, inspections, brakes, and other costs that keep your vehicle in good running condition. Note: If you opt for the standard mileage rate, you can’t take this deduction.
- Vehicle insurance costs associated with the business use of your vehicle. Note: If you opt for the standard mileage rate, you can’t take this deduction.
- If you lease your vehicle, deduct part of your lease payment on your tax return.
- If you own your vehicle, take a depreciation deduction.
- Car registration expenses may be partially deductible, depending on your state. Note: If you opt for the standard mileage rate, you can’t take this deduction.
- Car wash expenses when related to your business.
- Parking fees and tolls while on the job.
- Membership expenses related to your business (AAA, for example).
- Cell phone expenses: If you use your cell phone exclusively for your business, you can deduct the entire amount. If not, you can deduct the portion associated with your ride-share business. The same holds true for your wireless plan.
- Food and drink expenses for your clients are deductible up to 50%.
What records do I need to keep for the mileage deduction?
Keep track of any receipts when you spend money on job-related expenses. It’s also a good idea to keep a mileage log that shows list the dates you drove, where you drove, and the total miles driven. There are two very good reasons why you should keep detailed records:
- You’ll have an easier time filing your tax return.
- You’ll be able to prove that what you report on your tax return is true if the IRS comes knocking.
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