Tax Deductions for Delivery and Rideshare Drivers

The big one is the car: either the standard mileage rate (72.5 cents a mile through June 30 and 76 cents from July 1, 2026) or your actual car costs, not both. On top of the mileage rate you can add parking, tolls, the business share of phone and supplies, and platform fees, and you can take the self-employed health insurance deduction on Schedule 1. Commuting, personal clothing, and ordinary meals are not deductible.

Every dollar of business expense lowers your net profit, and net profit is the base for both income tax and self-employment tax. That makes deductions worth more than most drivers expect. In our standard example (a single driver with $46,575 of net profit), one extra $1,000 of Schedule C expense reduced total federal tax by $230.52, of which $141.30 was self-employment tax and $89.22 was income tax. A driver with $28,962.50 of net profit saved $215.64 from the same $1,000.

The deductions list at a glance

Deduction	Where it goes	The key rule
Car: standard mileage rate	Schedule C, line 9	Business miles times the rate; replaces actual car costs for the year
Car: actual expenses	Schedule C, lines 9 and 13 and others	Business share of gas, repairs, insurance, depreciation, and more, by miles
Parking and tolls for business	Schedule C (add to car expenses or other expenses)	Allowed on top of the standard rate; parking at your regular place of work is commuting
Car loan interest (business share)	Schedule C interest line	Allowed even with the standard rate; same interest cannot also go on Schedule 1-A
Phone and data plan	Schedule C, utilities or other expenses	Only the business percentage
Insulated bags, mounts, chargers, dash cam	Schedule C, supplies or other expenses	Ordinary and necessary for the work
Platform or service fees	Schedule C, commissions and fees	Deduct only if your gross receipts include the amount
Self-employed health insurance	Schedule 1, line 17 (Form 7206)	Not for months you could join an employer plan; limited by net profit
Half of self-employment tax	Schedule 1, line 15	Figured on Schedule SE; automatic
Retirement contributions	Schedule 1 (the line depends on the plan)	Lowers income tax, not self-employment tax
Qualified business income deduction	Form 8995, Form 1040 line 13a	Up to 20% of qualified business income, with a $400 minimum for active income of $1,000 or more

The car: choose one method

You can use the standard mileage rate or actual car expenses, but Publication 463 says that if you use the standard rate for a year, you cannot deduct depreciation, lease payments, maintenance and repairs, gasoline, oil, insurance, or registration fees for that year. They are inside the rate. For 2026 the rate is 72.5 cents for expenses paid or incurred before July 1 and 76 cents from July 1, per Announcement 2026-11. See the mileage log guide for how to track the two halves.

Three things can still be added on top of the standard rate: business-related parking fees and tolls, the business share of car loan interest (for example, 60% if the car is 60% business), and the business share of state and local personal property taxes on the vehicle. If your car loan interest also qualifies for the new Schedule 1-A deduction, you choose where to report it and cannot deduct the same amount twice.

Actual expenses make sense when your car is expensive to run and you drive fewer miles. The list includes depreciation, lease payments, registration, insurance, repairs, tires, gas, oil, garage rent, tolls, and parking, all prorated by business miles. Pub 463's example is a driver with 12,000 business miles out of 20,000 total, who can claim 60% of operating costs. Both methods need a mileage record, so there is no recordkeeping shortcut in choosing actual expenses.

Everything else a driver can deduct

Phone and data. Split it. Pub 334 says expenses that are partly business and partly personal must be separated, and only the business part is deductible. Pick a method you can explain, such as the share of work calls and data in a typical month.
Supplies. Insulated bags, phone mounts, chargers, and cleaning supplies for the car are ordinary and necessary: common in your field and helpful for your work. They do not have to be indispensable.
Platform fees. The IRS says a 1099-K shows gross amounts that do not reflect fees, credits, and refunds, and that you can deduct those. If your 1099 total is already net of fees, do not deduct them again. See the 1099 thresholds guide.
Self-employed health insurance. Premiums for medical, dental, vision, and qualified long-term care insurance for you, your spouse, and dependents, plus a child under 27, go on Form 7206 and then Schedule 1, line 17. You cannot include months when you were eligible for a plan subsidized by your or your spouse's employer.
Retirement. The IRS lists plan types designed for self-employed people. For 2026 the IRA limit is $7,500 and the 401(k) employee deferral limit is $24,500, per the IRS cost-of-living announcement. Which plan fits depends on your income, so read the IRS page on retirement plans for self-employed people before choosing.
Half of self-employment tax and the QBI deduction. Both are automatic parts of the return. See the Schedule C and SE walkthrough.

What is not deductible

Ordinary commuting. Pub 463 says the cost of driving between home and your main or regular place of work is a personal commuting expense, however far it is. Example 3 in that publication covers someone with no regular office and no home office: transportation between home and the first business contact inside the metropolitan area is nondeductible commuting, and so is the trip from the last contact home, but going from one customer to another is deductible.
The first-pickup question. How that rule applies to an app-based driver, such as the miles from home to the first pickup, is not answered directly in the IRS publications we reviewed. Log those miles in their own category so that you and a tax professional can decide. A home office that is your principal place of business changes the rule for trips from home to another work location in the same business, but few drivers meet that test.
Meals. Pub 334 says meals are deductible when a business trip is overnight or long enough that you need to stop for sleep or rest, and mostly at 50%. A lunch in the middle of a local shift does not qualify.
Everyday clothing. Publication 529 states the IRS test for work clothes: you must wear them as a condition of the work and they must not be suitable for everyday wear. That publication is written for employees, so ask a tax professional how it applies to your work. A logo T-shirt you wear anywhere is hard to claim.
The personal share of anything. Personal miles, the personal part of your phone, and non-business use of supplies are not deductible.

Keep what proves it

For each category keep the receipt or statement and a note of the business purpose. The IRS says you cannot deduct amounts that you approximate or estimate, and it says to keep records for 3 years from the date you file the return claiming the deduction. Tips income is separate from all of this; the tips deduction is taken after net profit, as covered in the tips deduction guide. To see what your own totals are worth, enter them in the 1099 gig tax calculator, or check how your tax changes with the self-employment tax calculator.

General information for tax year 2026, not tax advice.

Frequently asked questions

Can I deduct gas if I use the standard mileage rate?

No. The IRS says that if you use the standard mileage rate for a year you cannot also deduct actual car expenses such as depreciation, lease payments, maintenance and repairs, gasoline, oil, insurance, or registration fees for that year. The rate already includes them. Business parking fees and tolls are the exception and can be added.

Which is better, standard mileage or actual expenses?

It depends on your car. The IRS tip is to figure the deduction both ways if you qualify for both. To use the standard rate for a car you own you must choose it in the first year the car is available for your business; after that you can switch between methods in later years. If you start with actual expenses and claim MACRS depreciation, you cannot use the standard rate later.

Can I deduct my commute to the first delivery?

Often not. Publication 463 says trips between home and a regular place of work are commuting. If you have no regular office and no qualifying home office, it treats the location of your first business contact in your metropolitan area as your office. The IRS materials we reviewed do not address app-based dispatch directly, so ask a tax professional how it applies to you.

Can I deduct meals while I drive?

Generally no. Pub 334 says you can deduct meals and lodging if your business trip is overnight or long enough that you need to stop for sleep or rest to perform your duties, and in most cases only 50% of meal expenses. A normal shift in your own area does not meet that test.

Can I deduct the whole phone bill?

Only the business part. Pub 334 says an expense that is partly for business and partly personal must be split, and the personal part is generally not deductible. Keep the bill and a record of how you set the business percentage.

Do deductions reduce self-employment tax too?

Business expenses on Schedule C do, because they lower net profit, which is what self-employment tax is figured on. Deductions taken below adjusted gross income, such as the standard deduction or the tips deduction, do not. In our example a $1,000 Schedule C expense cut federal tax by $230.52.

Sources

IRS, Publication 463, Travel, Gift, and Car Expenses (2025): standard mileage rate rules, parking and tolls, car loan interest, actual expenses, commuting, records
IRS, Announcement 2026-11 (Internal Revenue Bulletin 2026-29): 76 cents from July 1, 2026, and Notice 2026-10: 72.5 cents before July 1
IRS, Publication 334, Tax Guide for Small Business (2025): ordinary and necessary expenses, business-personal split, meals, 1099-K note
IRS, Instructions for Form 7206 (2025): self-employed health insurance deduction
IRS, 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500, and Retirement plans for self-employed people
IRS, Form 1040-ES (2026): car loan interest deduction on Schedule 1-A
IRS, Publication 529: work clothing test
IRS, Form 1099-K FAQs: fees, credits, and refunds
26 U.S.C. § 199A, Qualified business income deduction, subsection (i): $400 minimum for active QBI of at least $1,000, taxable years beginning after 2025
IRS, Instructions for Form 8995 and Schedule 1 (2026 draft): line numbers