As a delivery or rideshare driver you're usually self-employed, so you pay tax on your profit: what you earned minus your business costs. Business costs lower both your income tax and your self-employment tax; a few deductions further down lower income tax only. Here's what most drivers can claim, and what they can't.
1. Your car: mileage
For most drivers this is the biggest deduction by far. Multiply your business miles by the IRS standard mileage rate: 72.5¢ for miles driven January 1 to June 30, 2026, and 76¢ from July 1, 2026. The rate already covers gas, repairs, insurance and depreciation, so you don't deduct those separately. See the 2026 mileage rate guide for which miles count.
2. Parking and tolls
Parking fees and tolls paid on business trips are deductible on top of the mileage rate. Parking tickets and traffic fines are not.
3. Your phone and plan
You can deduct the business share of your phone bill, and of the phone itself. If you use your phone for driving about 60% of the time, deduct about 60% of the cost. Pick a share you can explain, and keep it consistent.
4. Gear and supplies
- Phone mounts, car chargers and cables.
- Insulated delivery bags and drink carriers.
- For rideshare: water, mints, phone chargers and other things you provide to passengers.
- A dash cam, for the share you use for work.
5. Platform and service fees
If the gross amount on your 1099 includes fees the platform kept, deduct those fees so you're only taxed on what you received. Check your annual tax summary from each app. Background-check or vehicle-inspection fees the platform requires are also business costs.
6. Health insurance
If you pay for your own health insurance and you aren't eligible for an employer plan (including through a spouse), you can usually deduct the premiums. The deduction can't be more than your business profit. It lowers income tax, not self-employment tax.
7. Retirement savings
A SEP IRA or a solo 401(k) lets you put part of your profit away for retirement and deduct it. It lowers your income tax, though not your self-employment tax.
8. The tips deduction (2025 to 2028)
From 2025 through 2028, workers in occupations that customarily receive tips can deduct up to $25,000 of qualified tips a year from their income. The final IRS occupation list (April 2026) includes rideshare drivers and delivery drivers, including app-based work. Points to know:
- Only voluntary tips count. Service fees and automatic charges don't.
- It lowers income tax only. You still pay self-employment tax on tips.
- It shrinks for incomes over $150,000 ($300,000 for married couples filing jointly). Married couples must file jointly to claim it.
- For self-employed drivers it can't be more than your net profit from driving.
Keep your apps' tip statements; you'll need the tip totals.
Deductions you get automatically
- Half of your self-employment tax comes off your income.
- The qualified business income deduction is generally 20% of your profit, for most drivers. From 2026 it is at least $400 if your profit is at least $1,000 and you actively drive.
- The standard deduction, unless you itemize.
What you can't deduct
- Gas, repairs, insurance or car payments, if you use the standard mileage rate.
- Personal miles, including errands with the app on.
- Your own meals while you drive locally.
- Everyday clothes, even if you only wear them for work.
- Parking tickets and traffic fines.
Keep the proof
Keep receipts for expenses and a mileage log made at the time: date, miles, where you went and why. Keep records for at least three years after you file. Gigstrak logs your trips automatically, and you can snap a receipt to record an expense. Get Gigstrak on Google Play.
To see how much your deductions change your tax bill, try the quarterly tax calculator.
Sources
IRS Publication 463 (car expenses), Publication 334 and the Schedule C instructions (business expenses), the final "no tax on tips" regulations (April 2026), and Rev. Proc. 2025-32. This guide is general information, not tax advice; state rules vary.