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Tax Deductions for Uber and Lyft Drivers

Business Finance Business Planning Credits & Deductions Self-Employment Credits & Deductions Tax Filing Taxes

Uber, Lyft, and other rideshare drivers spend their days driving strangers from Point A to Point B. Just like any other business, Uber and Lyft drivers get to claim their mileage, gas, and other day-to-day expenses as business write-offs. Unlike regular businesses, Uber and Lyft drivers get to claim a few extra write-offs come tax time. If you’re like many other drivers wondering, what can I deduct as an Uber driver, stick around. You’re going to like this next part.

A happy woman driving a car and a man sitting on the back seat.

Passenger amenities

Driver ratings are no joke when you need people to trust you to get them from Point A to Point B. And now that many people are using Uber and Lyft while traveling for business, it’s important for passengers to have a car service that feels like a car service.

Those extra amenities, like water bottles, snacks, and extra phone chargers, are the stuff great tips and 5-star reviews are made of. And as long as you’re reserving them for your passengers, all of those amenities are tax deductions.

Think about that the next time you’re considering whether you should stock the backseat with a few protein bars and beverages.

Fees

Regardless of which rideshare service you drive for, they all earn a portion from your fares. So whether it’s Uber, Lyft, or another rideshare, any 1099 Form you receive should list all of the fees and commissions that were taken out of your fares. If you opt for paperless tax documents, you can also find that information in your driver dashboard or online account. And there’s no reason you should pay taxes on money you didn’t receive.

A clean ride

Just like amenities can make the difference between a 3-star rating and a 5-star rating, having a clean car can have the same result. A clean exterior sets a precedence for how passengers feel about riding with you. It’s the first impression they have of you as a driver, so make sure you’re putting your best tire, er foot, forward.

It’s equally important to maintain the interior of your vehicle. Even casual 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.

Not only will keeping a clean ride help with higher ratings and better tips, it will also help increase the value of your uber or lyft tax deductions. All of the car washes, upholstery cleaning, and air fresheners are considered write-offs, so keep your receipts. You’ll be glad you did when you file your taxes.

Your cellphone

If you don’t like mixing business with pleasure, it’s pretty common to keep an extra phone line exclusively for business transactions. If you do have a separate phone and/or phone line you use for your ride share service, that’s considered a business expense. AKA another tax deduction you can add to your growing list for your tax return.

If you don’t use a separate phone or phone line while working, you can still claim a percentage of your personal phone expenses as a business deduction. And like all good 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 what you need to come tax time.

Roadside Assistance

If you subscribe to a service like AAA or purchased a roadside assistance package through your car dealership or insurance provider, you’re in pretty good hands if anything goes wrong while you’re en route to your next destination. While peace of mind doesn’t have a price tag, the cost of roadside services do. And since you’re using it to make sure your passengers enjoy a safe and convenient ride, a portion (or all) of those membership fees are tax deductions and go towards lowering your taxable income.

You’re a small business owner. It’s time to claim your deductions like one.

You’re an independent contractor, which means your taxes, Medicare, and Social Security aren’t taken out of your check like they would be at a 9-to-5. Keeping a record of often overlooked business expenses works to lower your taxable income when you file — also lowering your tax bill.

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