Hey everyone, I’m Bette Hochberger, CPA, CGMA. For today’s blog, I’m going to be discussing deductions for Uber/Lyft drivers. If you’re one of the many brave souls navigating the streets as an Uber or Lyft driver, you probably know that earning money on the road comes with its own set of challenges. But here’s the good news: there are a lot of deductions you can take advantage of come tax season! Let’s break it down in a fun, friendly, and easy-to-understand way. Let’s go ahead and break it down!
Why Deductions Matter
First things first—what’s a deduction? In simple terms, a deduction reduces your taxable income, meaning you could end up paying less in taxes. For rideshare drivers, this can translate into significant savings. So, take a look of these top deductions you should keep an eye on!
Vehicle Deductions
 Mileage Deduction
This is the big one! You can deduct the miles you drive while working for Uber or Lyft. For 2024, the standard mileage rate is 67 cents per mile. To keep track, simply log your miles using a mileage tracking app or a good old-fashioned notebook. Just remember, only the miles that are related to your rideshare work count!
Actual Vehicle Expenses
Alternatively, you can choose to deduct actual expenses instead of the standard mileage rate. This includes:
– Fuel costs
– Oil changes
– Tires
– Repairs and maintenance
– Depreciation (if you own the vehicle)
To determine which method yields a bigger deduction, keep good records of all your expenses!
Tolls and Parking Fees
Whether you’re picking up passengers at the airport or navigating through downtown traffic, tolls and parking fees can add up. Good news: you can deduct these costs too! Just make sure to keep your receipts as proof.
Phone and Internet Expenses
As a rideshare driver, your smartphone is your lifeline. You rely on it for navigation, communication, and rideshare apps. You can deduct a portion of your phone bill and any other related expenses. A good rule of thumb is to calculate how much you use your phone for work versus personal use and apply that percentage to your total bill.
Insurance
Rideshare insurance is essential, and guess what? You can deduct the cost! If you have a separate policy for your rideshare driving, all the better. Keep your insurance statements handy for tax time.
 Supplies and Equipment
Have you invested in supplies to make your passengers more comfortable? Items like water bottles, snacks, and even charging cables are deductible. If you’ve purchased any equipment—like a new phone mount or dash cam—hang onto those receipts too!
Home Office Deduction
If you use a portion of your home for administrative tasks related to your rideshare work—like planning your schedule or managing expenses—you may qualify for the home office deduction. Just be sure to follow the IRS guidelines to ensure you’re eligible!
In the hustle and bustle of rideshare driving, it’s easy to overlook potential deductions. But keeping organized records of your expenses will make tax time a breeze. Consider using apps like MileIQ or QuickBooks to track your mileage and expenses throughout the year.
In summary, understanding these deductions can help you save money as a rideshare driver. Keep track of your expenses, stay organized, and make the most of your earnings. Drive safely and good luck out there!
