Calculate your Uber & Lyft tax deductions and maximize your savings with IRS mileage rates
As an Uber or Lyft driver, you're classified as an independent contractor, which means you're responsible for paying self-employment taxes. However, this also means you can deduct legitimate business expenses from your taxable income, potentially saving thousands of dollars per year.
The IRS allows rideshare drivers to deduct expenses that are "ordinary and necessary" for operating their business. The two most significant deductions are:
The standard mileage rate for 2024 is $0.67 per mile for business use. This rate is updated annually by the IRS and covers gas, depreciation, insurance, and maintenance. Alternatively, you can track actual expenses and deduct the business-use percentage.
Rate: $0.67 per mile (2024)
Pros:
Best for: Drivers with newer, fuel-efficient cars
Includes: Gas, repairs, insurance, depreciation
Pros:
Cons:
Best for: Drivers with older cars or high repair costs
⚠️ Important: You must choose the standard mileage method in the first year you use your car for business. If you use actual expenses in year one, you cannot switch to standard mileage later for that vehicle.
The IRS requires "contemporaneous" mileage logs, meaning you must track mileage as you drive, not reconstruct it later from memory. Here's what you need to record:
Stride
Free automatic tracking, integrates with Uber/Lyft
MileIQ
Auto-detect drives, swipe to classify as business/personal
Everlance
GPS tracking, expense categorization, tax reports
QuickBooks Self-Employed
Complete tax solution with mileage tracking
Beyond vehicle expenses, rideshare drivers can deduct these business-related costs:
Deduct the business-use percentage of your phone bill (typically 50-75% for full-time drivers)
Regular cleaning to maintain vehicle presentation
Water bottles, mints, phone chargers, tissues for passengers
Fees paid while waiting for rides or during business trips
AAA membership or similar services
Rideshare insurance add-ons beyond personal policy
💡 Pro Tip: Keep all receipts organized digitally using apps like Expensify or Shoeboxed. Take photos of receipts immediately after purchase to avoid losing them.
Annual business miles: 12,000
Standard mileage deduction: 12,000 × $0.67 = $8,040
Other expenses: $1,200 (phone, supplies, car washes)
Total deductions: $9,240
Tax savings (27.3% combined rate): ~$2,522
Business miles: 30,000 | Total miles: 35,000 (85.7% business use)
Actual expenses:
Vehicle deduction: $12,084
Other expenses: $2,400
Total deductions: $14,484
Tax savings (27.3%): ~$3,954
Annual business miles: 8,000
Standard mileage: 8,000 × $0.67 = $5,360
Other expenses: $600
Total deductions: $5,960
Tax savings (27.3%): ~$1,627
No. The IRS considers your home your principal place of business for rideshare driving. Mileage is only deductible once you turn on the app and are available for rides, or during a pickup/dropoff. Driving home after your last ride is also not deductible.
All business miles count, regardless of which platform you're using. You can combine mileage from all rideshare platforms (Uber, Lyft, DoorDash, etc.) into one mileage log.
Yes! You still need to track business vs. personal miles to calculate the business-use percentage of your vehicle. This percentage is applied to all your actual expenses.
Yes, car washes and detailing are fully deductible business expenses for rideshare drivers, as maintaining a clean vehicle is necessary for your business.
The IRS may request your mileage logs and receipts. This is why it's critical to use a GPS tracking app or maintain detailed manual logs. Apps like Stride, MileIQ, or Everlance provide IRS-compliant reports that include GPS timestamps.
You can switch from standard mileage to actual expenses in future years, but once you use actual expenses for a vehicle, you cannot switch back to standard mileage for that vehicle. Choose carefully in year one!
Self-employment tax is 15.3% (12.4% for Social Security and 2.9% for Medicare). This is in addition to your regular income tax bracket. Deductions reduce both your income tax and self-employment tax.
If you expect to owe $1,000 or more in taxes for the year, the IRS requires quarterly estimated payments (April 15, June 15, September 15, and January 15). Use IRS Form 1040-ES to calculate your payments.
Yes, if you use the actual expense method, you can deduct the business-use percentage of your lease payments. However, you cannot deduct lease payments if using the standard mileage rate (it's already included in the $0.67/mile).
Report rideshare income on Schedule C (Form 1040) as self-employment income. Vehicle expenses go on Line 9 (car and truck expenses) or Line 13 (depreciation). Other business expenses are listed in their respective categories.
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