Loader gif
Jump to main content

Tax Deductions for Uber® and Lyft® Drivers

Gig Workers Self-Employed Taxes Self-Employment Credits & Deductions
A smiling Uber driver with a woman riding as his passenger in the back seat

File your self employed taxes with confidence.

Backed by our $100k accuracy guarantee.

Updated for tax year 2023.

If you work as a rideshare driver for Uber, Lyft, or another rideshare service, you spend much of your time and energy driving strangers from one place to another.

Whether you do this as a side gig or a full-time job, you can claim your mileage, fees, and other day-to-day expenses as business write-offs. And even better — as an Uber or Lyft driver, you can claim a few additional write-offs during tax time that are unavailable to regular businesses.

Here are several ways to save on taxes as a rideshare driver this year.

Mileage

If you work as a rideshare driver, keeping a record of your business miles is crucial if you want to claim the mileage deduction. One of the easiest ways to do this is by using the standard mileage rate. For the year 2023, you can deduct 65.5 cents per mile for business mileage using this standard rate. The IRS sets this standard rate and takes into account various costs such as gas, car maintenance, and depreciation, among other factors.

You can deduct miles driven on the way to pick up your first passenger, driving passengers to their destination, between passengers, and on the way home from picking up your last passenger.

For more information on this tax deduction, check out How to Claim Mileage Deductions and Business Car Expenses. If you want to estimate your mileage deduction for 2023, you can also use our handy mileage reimbursement calculator.

Passenger amenities

Offering “extras” to your passengers is a solid way to make good tips. But did you know passenger amenities are also tax deductible? Water bottles, snacks, gum, mints, phone chargers, and even subscriptions to music streaming services like Spotify® — as long as they’re purchased for your passengers, these can all qualify for a tax write-off.

The next time you stock the backseat with extra phone chargers and beverages, make sure you save your receipts. Keep detailed records of amenity expenses so you can deduct these as business expenses when tax season rolls around.

Fees and tolls

Fees are often inescapable as a rideshare driver. Regardless of which rideshare service you drive for, they all earn a portion from your fares. But while you can’t prevent Uber and Lyft from taking their cut of your profits, you don’t have to worry about paying taxes on money you didn’t receive — you can deduct fees and commissions charged by the rideshare platform as part of your business expenses.

The 1099 tax form(s) you get in the mail from the rideshare service should list any fees and commissions they took from your earnings. If you opt for paperless tax documents, you can also view these figures via your online account or driver dashboard.

Parking fees and tolls you paid while transporting or picking up passengers are also tax-deductible, so keep track of those fees as well.

A clean ride

Having a clean car is just as important as having good amenities when it comes to ratings. A clean car exterior sets a good first impression, which sets you up for success. It’s equally important to maintain your vehicle’s interior — most passengers aren’t interested in leaving their ride covered in pet hair or wearing a strange odor they didn’t have before they got in your car, so keeping things clean is essential.

Not only will keeping a clean ride help with higher ratings and better tips, but it will also help increase the value of your Uber or Lyft tax deductions. Car washes, cleaning supplies, detailing and upholstery cleaning, and air fresheners can be deducted on your tax return, so keep your receipts for these services.

Your cellphone

Many rideshare drivers keep a separate business phone line for their work. If you do have a separate phone or phone line you use exclusively for your rideshare service, it’s considered a business expense — AKA another tax deduction you can add to your growing list of rideshare driver tax write-offs.

But what if you don’t use a separate phone or phone line while working? If you use your personal phone for business purposes, you can still claim a percentage of your phone expenses as a business deduction. Like with all rideshare driver tax deductions, all you need to do is keep track of those receipts. Thankfully, most phone services keep track of your phone bills online, so it’s pretty easy to log in and find the information you need.

Roadside assistance

Ever had a flat tire on the way to pick up your next fare? Or find yourself frantically searching for fuel in the middle of an unfamiliar route? If you pay for roadside assistance like AAA or a similar service provided by your insurance provider, that’s yet another tax deduction you can claim as an Uber or Lyft driver.

Since you’re using this service to ensure your passengers enjoy a safe and convenient ride, some (or all) of those membership fees are tax-deductible and help lower your taxable income. Just make sure you document the membership costs and clearly indicate their association with your rideshare business.

You’re a small business owner, so file taxes like a boss.

As a rideshare driver, you’re considered an independent contractor. This means you’re responsible for setting aside money typically taken out of your paycheck by an employer, such as Medicare and Social Security taxes.

Fortunately, TaxAct® can help you pay estimated taxes, claim tax deductions, and simplify the tax filing process in general. With TaxAct Self-Employed, you can file with confidence backed by a $100k Accuracy Guarantee*. Keep more of that hard-earned cash in your pocket this year and take advantage of rideshare driver tax deductions when you file with TaxAct.

 

*Guarantee limited to $100,000 to pay legal or audit costs and the difference in lower refund or higher tax liability. Additional terms and limitations apply. Read about the TaxAct Maximum Refund and $100k Accuracy Guarantees.
This article is for informational purposes only and not legal or financial advice.
All TaxAct offers, products and services are subject to applicable terms and conditions.
All trademarks not owned by TaxAct, Inc. that appear on this website are the property of their respective owners, who are not affiliated with, connected to, or sponsored by or of TaxAct, Inc.

 

File your self employed taxes with confidence.

Backed by our $100k accuracy guarantee.

Related Articles

Refer a friend, Get $20.

Learn More