Top 10 Tax Deductions for Uber Drivers
Most Uber and Lyft drivers overpay on taxes by thousands of dollars. Here are the deductions you can't afford to miss.
As a rideshare driver, you're an independent contractor—which means you can deduct business expenses to lower your taxable income. The average Uber driver can save $3,000-$5,000 annually with proper deductions.
1. Mileage Deduction (The Big One)
2025 Rate: 70¢ per mile
This is your biggest tax savings. Track every mile driven while waiting for rides, driving to pick up passengers, and taking passengers to destinations. If you drive 20,000 miles for Uber, that's a $14,000 deduction.
Pro tip: Use Stride or MileIQ to automatically track miles. Manual logs work too—just be consistent.
2. Phone & Service
Deduct the business portion of your phone bill (typically 50-80% if you use it primarily for rideshare). Example: $100/month × 70% business use × 12 months = $840 deduction.
3. Car Washes & Detailing
Keep your car clean for 5-star ratings? Fully deductible. Save every receipt. Average annual deduction: $300-$600.
4. Roadside Assistance
AAA membership, emergency kits, jumper cables—all deductible if you carry them for rideshare.
5. Snacks & Water for Passengers
Offering bottled water or mints? Keep receipts. Typical deduction: $100-$200/year.
6. Uber/Lyft Commission & Fees
The 25-30% platform fee Uber takes from each ride is deductible. This is already subtracted from your 1099, but if you're tracking gross earnings, remember this.
7. Parking & Tolls
Paid parking while waiting for rides and toll roads during trips are 100% deductible.
8. Car Accessories
Dash cam ($100-$200), phone mount ($30), seat covers ($50), floor mats ($40)—all deductible in the year purchased.
9. Health Insurance Premiums
If you're self-employed and pay for your own health insurance, you can deduct 100% of premiums. This is an above-the-line deduction (even better than itemized).
10. Retirement Contributions
Contribute to a SEP IRA or Solo 401(k) and deduct up to $66,000 (2024 limit). If you earned $50,000 driving and contribute $10,000, you only pay taxes on $40,000.
⚠️ You Cannot Deduct:
- Commute from home to first ride (personal miles)
- Traffic tickets or parking violations
- Meals for yourself (unless traveling overnight)
Standard vs. Actual Expense Method
Standard Mileage (70¢/mile in 2025): Simpler. Just track miles.
Actual Expense Method: Track gas, insurance, repairs, depreciation. More work but can save more if you drive a newer, expensive car.
Most drivers save more with standard mileage.
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