Mileage, phone, vehicle expenses — everything an Uber and Lyft driver needs to know to cut their tax bill and avoid penalties.
As an Uber driver, your car is your business. These deductions can dramatically reduce what you owe the IRS.
67¢/mile for every business mile — including miles driven while waiting for rides (online but no passenger).
The Uber app, GPS navigation, and passenger communication make your phone 80–90% business use for most drivers.
Car phone mount, charger cable, and any phone accessories used for rideshare driving.
Bottled water, mints, and other amenities you provide to passengers — deductible business supplies.
Keeping your car clean for passengers is a business requirement — deduct all car washes.
The portion Uber keeps (typically 25–30%) is a deductible platform fee that reduces your taxable income.
All parking fees and tolls paid while driving for Uber are 100% deductible.
Self-employed with no employer coverage? 100% of premiums are deductible.
A dash cam is a legitimate safety and business expense for rideshare drivers.
A driver earning $25K net can contribute $6,250 to a SEP-IRA and save $1,719 in taxes.
Miles driven while online and waiting for a ride request are also deductible — not just passenger miles. The IRS allows all "engaged time" miles.
The IRS requires a contemporaneous log. Apps like Stride or MileIQ track automatically. Reconstructing at year-end is risky.
Uber takes 25–30% of each fare. That amount is a deductible platform fee. On $30,000 in gross fares, that is $7,500–$9,000 in deductions.
Uber does not withhold taxes. Missing quarterly payments results in IRS underpayment penalties of ~8% annually.
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Yes. If you earn $600+, Uber sends a 1099-K. They also send a 1099-NEC for other payments. You owe taxes on all income, even if no 1099 is issued.
Yes. Miles driven while the Uber app is on and you are waiting for or en route to a pickup are deductible business miles — not just passenger miles.
The IRS standard mileage rate is 67 cents per mile for business use. This covers fuel, maintenance, and depreciation.
Most drivers benefit more from the standard mileage method (67¢/mile) since it is simpler and often results in a larger deduction. You must choose your method in your first year and stick with it.
Set aside 25–28% of net income (gross earnings minus deductions). With mileage and other deductions, your taxable income will be significantly less than gross fares.
Ask anything about deductions, deadlines, or quarterly taxes. Get specific dollar amounts — not generic advice.
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