11 Deductions for Rideshare Drivers

Top 10 Deductions for Ride-Share Drivers

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:

  1. Gasoline expenses associated with the business use of your vehicle.
  2. 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.
  3. 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.
  4. If you lease your vehicle, deduct part of your lease payment on your tax return.
  5. If you own your vehicle, take a depreciation deduction.
  6. 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.
  7. Car wash expenses when related to your business.
  8. Parking fees and tolls while on the job.
  9. Membership expenses related to your business (AAA, for example).
  10. 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.
  11. 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: 

  1. You’ll have an easier time filing your tax return. 
  2. You’ll be able to prove that what you report on your tax return is true if the IRS comes knocking. 

Read also Rideshare Drivers: 5 Tax Mistakes You Must Avoid

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