Rideshare drivers are self-employed. That means you pay both the employee and employer portions of Social Security and Medicare taxes — but it also means you can deduct every legitimate business expense from your taxable income.
Most drivers leave thousands of dollars in deductions on the table each year. Here’s what you can actually deduct.
The Mileage Deduction: Your Biggest Opportunity
The standard mileage deduction for 2026 is $0.70 per mile (IRS standard for 2025 was $0.70; confirm the current year rate at irs.gov). You can deduct every mile driven for business purposes.
What counts as business miles for rideshare:
- Miles driven with a passenger in the car
- Miles driven to pick up a passenger (deadhead miles)
- Miles driven to a starting area when you first go online
- Miles driven between rides in the same shift
What doesn’t count:
- Commuting from home to your starting point before your first ride
- Personal driving
On 30,000 business miles per year at $0.70: $21,000 deduction. At a 22% tax bracket, that’s $4,620 off your tax bill.
Track mileage from day one. Use an automatic tracker app (like the one in RideOwn for BASIC and above subscribers) to log trips without manual entry.
Vehicle Expenses (Actual Method vs Standard Mileage)
You must choose one method per vehicle per year — you can’t mix and match:
Standard mileage: Deduct the IRS rate per business mile. Simpler, no receipts required per trip.
Actual expenses: Deduct the business-use percentage of all vehicle costs:
- Gas
- Insurance
- Maintenance and repairs
- Car washes
- Registration fees
- Depreciation (via MACRS or Section 179)
- Lease payments (if applicable)
The actual method requires tracking all expenses and calculating your business-use percentage. It often yields a larger deduction for high-mileage drivers with expensive vehicles.
Phone and Data Plan
Your smartphone is a business tool. If you use it exclusively or primarily for rideshare, you can deduct:
- Monthly phone bill: The business-use percentage of your plan
- Phone hardware: A portion of the phone’s cost, depreciated or via Section 179
- Apps and subscriptions used for work (GPS apps, fleet tracking, etc.)
Keep your annual phone bills. A driver using their phone 80% for rideshare work can deduct 80% of a $100/month plan — $960/year.
Platform Subscriptions
Subscription-based rideshare tools are fully deductible as business software expenses:
- RideOwn BUSINESS subscription: $59.99/month × 12 = $719.88/year deductible
- GPS navigation apps
- Mileage tracking subscriptions
- Accounting software (QuickBooks Self-Employed, etc.)
Other Deductible Expenses
- Phone mount and accessories: Dashboard holder, charger, aux cable
- Car supplies: Air fresheners, tissues, water bottles for passengers, phone charger cords
- Roadside assistance membership (AAA, etc.)
- Business insurance (commercial auto coverage): Deductible if it’s for rideshare
- Parking fees incurred during rides
- Tolls incurred during rides (also reimbursed by platforms in some cases)
- Car washes: When used for business presentation
- Vehicle inspection fees: Required for platform compliance
Quarterly Estimated Taxes
Rideshare income is not withheld. You must pay estimated taxes quarterly:
- Q1: Due April 15 (Jan 1 – Mar 31)
- Q2: Due June 15 (Apr 1 – May 31)
- Q3: Due September 15 (Jun 1 – Aug 31)
- Q4: Due January 15 of next year (Sep 1 – Dec 31)
Underpayment penalties apply if you owe more than $1,000 at filing and didn’t pay quarterly. Set aside 25–30% of net rideshare income for taxes.
Frequently Asked Questions
Can I deduct rideshare expenses if I use my car for personal driving too? Yes — you deduct the business-use percentage. If 70% of your miles are for rideshare, you deduct 70% of vehicle expenses (under the actual method) or simply deduct the business miles (under the standard mileage method).
Do I need receipts for every deduction? For mileage, a mileage log is sufficient. For other expenses, keep receipts or bank/credit card records. Receipts under $75 technically don’t require a paper receipt per IRS guidelines, but digital records are easy to maintain.
When do I get my 1099 form from Uber or Lyft? Uber and Lyft send 1099-K and/or 1099-NEC forms by January 31 for the prior year. You receive a 1099-K if you processed more than $600 in payments; the threshold has changed in recent years — check current IRS guidance.