Skip to content
KG
KG Tax & Consulting
Industry

Tax & Accounting for Gig Economy Workers

Rideshare and delivery drivers are self-employed. Mileage is the biggest deduction, and quarterly estimated payments are required. The platforms report your gross fares to the IRS, so the difference between drivers who track and drivers who don't shows up directly on the tax bill.

Katie Gorles
Written by
Katie Gorles
Updated July 6, 2026

Mileage tracking

Standard mileage rate for 2025 is 70 cents per business mile. A driver putting 30,000 miles on the car can deduct $21,000 before any other expense. App-based tracking (MileIQ, Stride) creates the contemporaneous log the IRS requires. Business miles include driving between rides and to pickup zones, not just the miles with a passenger or order in the car, which is why the app logs beat the platform's own mileage summary.

Reading the platform 1099s

Uber, Lyft, DoorDash, and Instacart typically report gross fares on a 1099-K or 1099-NEC before their commissions come out. The commissions, service fees, and tolls the platform kept are deductions you claim, and the annual tax summary each platform publishes is where those numbers hide. Income under a platform's reporting threshold still belongs on the return.

Other deductible expenses

Phone (business-use percentage), dashcam, car washes, parking, tolls, snacks for passengers (where applicable), and platform fees all count. Insurance riders for rideshare coverage, roadside assistance, and the portion of accessories used for the work (chargers, mounts, insulated delivery bags) belong on the list too.

Standard mileage vs actual expenses

The standard rate bundles gas, maintenance, insurance, and depreciation into one per-mile figure. Actual expenses can win for newer or more expensive vehicles, but the choice has rules with teeth:

  • Standard mileage in year one preserves the right to switch methods later
  • Taking accelerated depreciation locks that vehicle out of the standard rate for good
  • Either way, personal versus business use has to be split, which the mileage log already proves
Have a specific situation?
Call the office and a human answers.
(561) 660-8182

Quarterly estimates

Platform income has no withholding. Without quarterly estimated payments, drivers face underpayment penalties plus a large April balance. Self-employment tax applies on top of income tax, which surprises drivers coming from W-2 jobs; setting aside a fixed share of each weekly payout is the habit that makes the quarterlies painless.

Records that survive an IRS letter

Mileage cases are won and lost on the log. A year of app-tracked trips, the platform tax summaries, and a folder of expense receipts answer nearly every question the IRS asks. Reconstructed logs and round numbers are how legitimate deductions get disallowed.

Common questions

Actual expenses or standard mileage?
Most rideshare drivers come out ahead with the standard mileage rate. The decision is year-one, we compare both methods at first filing.
Do the miles between dropoff and my next pickup count?
Yes. Miles driven while working, including repositioning between rides, are business miles. The commute from home before you go online and the drive home after are the miles that don't count.
I made a few thousand dollars and never got a 1099. Do I still report it?
Yes. The filing thresholds control what the platform sends, not what you owe. The income goes on Schedule C either way, along with the deductions that shrink it.
Can I deduct my car payment?
Not the payment itself. The standard mileage rate already includes depreciation, and under actual expenses you deduct depreciation and loan interest for the business-use share rather than the principal.

Related

More industries we serve

A Conversation, Not A Form

Ready to get started?

Schedule a free consultation today and see how KG Tax & Consulting can help you.

Schedule Appointment