Tax Deductions for Rideshare drivers

As an Uber or Lyft driver, you're an independent contractor and can claim the below tax deductions.

Mileage you can deduct

On-trip and between passengers
All miles driven while 'online' with your ridesharing service are deductible. This includes the miles driven between passenger pickups.
On the way to first passenger
As a rideshare driver, all miles driven in search of your first passenger, and the miles driven from your last passenger back home, are tax deductible.
Work-related errands
Driving to the grocery store to buy passenger goodies, on your way to a car wash, to an information session at an Uber greenlight hub, or other work-related errands are tax deductible.

Expenses you can deduct

Passenger Goodies
As a rideshare driver, you can deduct the complimentary goodies that you offer your passengers like bottled waters, mints and Halloween candy.
Phone & Service
If you have to use a phone for work, the purchase and monthly service bill are tax deductible!
Food & Drink
You can deduct half of the cost of a meal if you are out of town for work purposes. Discussing work with a client or prospective referral during a meal? That counts too!
Tolls
Any toll fees that you pay while working are tax deductible! Just make sure they're not already being reimbursed.
Parking
If you have to pay for parking while you're working, that’s tax deductible. Unfortunately, parking tickets, traffic violations, and speeding tickets are not.
Phone Accessories
Phone accessories that help you do your job as an independent driver, like car chargers, cables, and phone holders, are all tax deductible.
Music & Paid Apps
As a rideshare driver, if you pay for a music service like Spotify or Apple Music to entertain passengers while working, your monthly subscription fee is tax deductible.
Inspections
Vehicle inspections and background checks that are required for work are deductible. These keep your business compliant and your passengers safe!
Roadside Assistance
Staying safe on the road is part of the job. Fees for AAA or other roadside assistance programs are tax deductible.
Dashcam
As a rideshare driver, you might find yourself in some sticky situations. Dashcams that are used as a security precaution are deductible.
Health Insurance
If you’re self-employed and don’t have the option to buy health insurance through an employer or spouse, you can deduct your monthly health insurance payments!

Other expenses you can deduct

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Non-Deductible Expenses

Clothing
Clothing that can be reasonably worn outside of your work enviornment is considered a personal hygene expense and is explicitly deemed a non-deductible expense.
Haircuts
A haircut is considered a personal hygiene expense and is explicitly deemed a non-deductible expense for independent workers.
Life Insurance
You can't deduct the cost of premiums for life insurance where you are the beneficiary. This includes taking policies out to secure a loan for your business, or to fund a succession plan.
Parking Fines and Tickets
Misconduct isn't part of your job! Fees for legal violations, such as parking tickets or court fees, are not tax deductible.
Commuting
If you have a permanent office from which you conduct your business then the miles driven between your home and that office are considered commuting and are not tax deductible.
Dry Cleaning
Dry cleaning is considered a personal hygiene expense and is therefore explicitly deemed a non-deductible. Unless you're cleaning a uniform, the expense is considered personal.

Non-Deductible Expenses if You Take the Standard Mileage Deduction

Gas
Gas is part of maintaining a vehicle for business and is deductible only if you choose not to take the standard mileage rate.
Oil Change
An oil change is standard car maintenence and so is deductible only if you choose not to take the standard mileage rate.
Car Insurance
Car insurance is required for all car owners and thus is deductible only if you choose not to take the standard mileage rate.
Car Repairs
All cars will eventually need a repair. Repairs are deductible only if you choose not to take the standard mileage rate.
Car Lease Payments
If you are leasing a car, you can deduct the lease payments only if you choose not to take the standard mileage rate.
Car Depreciation
Car depreciation is deductible only if you choose not to take the standard mileage rate. Total allowed may be reduced if business use falls under 50%.

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