Taxes
The mileage deduction, explained for gig drivers
If you deliver or drive for an app, you are self-employed. Your miles are the single biggest deduction available to you, and most drivers under-claim them because they never wrote them down.
What the deduction actually is
The IRS lets you deduct a fixed amount for every business mile you drive instead of adding up receipts for gas and repairs. That amount — the standard mileage rate — is set each year and covers gas, oil, tires, maintenance, insurance and depreciation. Check the current year's rate on the IRS page for standard mileage rates, because it changes annually.
It reduces your taxable income, not your tax bill dollar for dollar. If you deduct $7,000 of mileage and your combined income and self-employment tax rate is around 30%, that's roughly $2,000 you keep.
Which miles count
- Driving to a pickup after you accept an order.
- Driving to the customer.
- Driving between orders while you are online and available.
- Trips for the business — a car wash for rideshare, a run for delivery bags.
What does not count: your commute before you go online, personal errands, and any miles driven with the app off.
A worked example
Say you drove 18,000 business miles across the year and earned $34,000 gross. At a mileage rate of $0.70, your vehicle deduction is $12,600. Your taxable profit drops to about $21,400 before other expenses. That is the difference between owing money in April and getting a refund, and it comes purely from having a log.
What the IRS expects you to keep
A log kept as you drive, with the date, the purpose and the miles for each trip, plus your odometer readings at the start and end of the year. Screenshots of the delivery app are not enough on their own: those apps typically only report on-trip miles and miss the driving between orders, which for most drivers is a large chunk of the total.
Expenses you can deduct on top
The mileage rate covers the car, but not everything: the business-use share of your phone bill, hot bags and coolers, phone mounts, tolls and parking during work, and app subscriptions you pay for to do the job. Keep those separate from vehicle costs.
This is general information, not tax advice. Rules change, and your situation may differ — confirm with a tax professional or IRS guidance before filing.
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