If you drive for Uber, Lyft, DoorDash, Instacart or any delivery app, the tax system treats you as a business owner — which is good news, because business owners get deductions employees do not. The catch: you only get them if you have the records.
This guide covers the three things that decide how much you keep: tracking your mileage, tracking your expenses, and setting aside for tax as you earn so the bill never blindsides you.
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Mileage is usually your biggest deduction
Most drivers can deduct their business miles at a standard per-mile rate — and because driving is the job, those miles add up fast. The deduction often dwarfs every other expense combined. But it is only claimable with a log: dates, purpose and miles. No log, no deduction, even if you genuinely drove.
Log miles for every shift, plus any business errands (to the dealer for a service, to buy supplies). A running total at the standard rate shows the deduction growing through the year.
Standard mileage vs actual expenses
There are generally two ways to deduct vehicle costs: the standard mileage rate (miles times a set rate) or actual expenses (the business-use share of gas, maintenance, insurance, depreciation). You typically pick one method per vehicle. For most rideshare and delivery drivers the standard mileage rate is simpler and often larger — but track both gas/maintenance and miles so you can compare.
Set aside for tax with every payout
No one withholds tax from your gig income, so it is on you. A practical habit is to move a fixed percentage of your taxable income (earnings minus mileage deduction and expenses) into a separate account each week or month. When the quarterly or annual bill arrives, the money is already there.
Know your real hourly rate
Gross pay per hour is a vanity number. Real take-home is earnings minus the cost of the miles and expenses that earned them. Tracking hours alongside earnings reveals your true hourly rate — and often which platform or time block actually pays. Our Rideshare & Delivery Driver Tax & Mileage Tracker does this automatically, including a tax set-aside and effective hourly rate.
Skip the setup work
Everything in this guide works with paper and a pencil. If you want the structure ready-made — designed, tested and printable in minutes — the matching templates are below.
Frequently asked questions
How much should I set aside for taxes as a driver?
A common rule of thumb is to set aside roughly a quarter to a third of your net (taxable) income, but the right figure depends on your total income and local tax brackets. Setting aside a fixed percentage of net per payout is far easier than finding a lump sum later.
Do I need to track miles if the app already shows them?
Yes. App mileage usually only covers time with a passenger or active delivery and often misses the drive to a busy area, between gigs, or on errands — all of which can be deductible. A complete personal log captures more and protects you if asked to substantiate it.
Can I deduct gas AND mileage?
Generally no — the standard mileage rate already accounts for fuel and wear, so you choose either the mileage method or actual vehicle expenses, not both. Track each so you can use whichever is larger.
About this guide. Published by OmniAura Digital, the team behind the printables and templates in our library. Our guides describe methods you can use with paper and a pencil; where we mention templates, they are our own products. Spotted an error? Tell us at support@omniauradigital.com and we'll fix it.
General information only — not tax advice. Mileage rates, methods and rules vary by country and change yearly; confirm with your tax authority or a professional.