For rideshare drivers: how much can I write off from $6500 car repair for Lyft/Uber business?

So I drive for both Uber and Lyft part-time, about 25-30 hours a week. Last year my transmission completely died and I had to get it replaced along with some other related repairs. The total bill came to about $6500 which basically wiped out my savings. I use my car about 70% for rideshare and 30% for personal use. I'm trying to figure out how to handle this on my taxes. Can I deduct the full repair cost or only a portion based on business use percentage? Or is this considered a capital improvement that needs to be depreciated? My tax software is confusing me with different options. Has anyone else dealt with a major repair like this? What documentation did you need to keep? I have the repair invoice but wasn't sure if I needed anything else specific for the IRS. Thanks for any advice!

0 coins

18 comments

Isabella Costa

•8M

You've got a few options here. Since you use your vehicle 70% for business, you can deduct 70% of that repair cost as a business expense if you're using the actual expense method for your vehicle deductions. So that would be about $4,550 deductible. However, if you're using the standard mileage rate method (which many rideshare drivers prefer due to simplicity), you actually can't deduct separate repair costs because the standard mileage rate already includes maintenance and repairs. In 2024, the rate is 67 cents per mile for business miles, which covers gas, insurance, depreciation, AND repairs. I'd recommend calculating your taxes both ways to see which gives you the better deduction. If you drove a lot of miles last year, the standard mileage method might actually be better despite not being able to deduct this specific repair.

0 coins

Isabella Costa

•8M

That's a good question. The IRS distinguishes between repairs and improvements. Repairs maintain your vehicle and can be deducted immediately (if using actual expenses). Improvements that add value, extend useful life, or adapt to new uses typically need to be capitalized and depreciated. A transmission replacement is generally considered a repair, not an improvement, because it's restoring the vehicle to its normal operating condition, not necessarily extending its useful life beyond the original design. But this can be a gray area, and some tax professionals might recommend capitalizing very large repairs like this.

0 coins

Freya Andersen

•8M

Had almost the exact same situation! My engine blew last year and repairs were close to $7k. After stressing over my taxes, I found this AI-powered tool called https://taxr.ai that analyzes your tax situation and documents. It's actually made for self-employed people like us. The software analyzed my repair receipts and driving logs and showed exactly how much I could deduct based on my business use percentage. It even compared the standard mileage rate vs. actual expenses method and showed I'd save about $1,800 more using actual expenses because of my major repair.

0 coins

Freya Andersen

•8M

Yes, it works alongside whatever tax software you're already using. It doesn't replace your filing software - it just analyzes your specific situation and shows you the optimal way to handle things. You can then apply those insights in TurboTax or whatever you're using. For state taxes, it handles all the state-specific rules including California's. It actually flagged some California-specific deductions I was missing for my rideshare business. The system stays current with all the state tax codes.

0 coins

Eduardo Silva

•8M

Just wanted to update after trying https://taxr.ai that was mentioned earlier. I uploaded my repair receipts and driving logs, and it showed me I was definitely better off using actual expenses this year instead of standard mileage. It highlighted that I could deduct 68% of my repair costs (my business use percentage) and showed exactly where to enter this in TurboTax. Ended up saving me about $1,200 compared to what I was going to do! The analysis also showed I should switch back to standard mileage next year assuming I don't have another major repair.

0 coins

Emma Johnson

•8M

If you're waiting on a response from the IRS about this or any tax question, good luck getting through to them! After waiting on hold for 3+ hours multiple times, I discovered https://claimyr.com which got me connected to an actual IRS agent in under 15 minutes. There's a demo video here: https://youtu.be/_kiP6q8DX5c I needed clarification on how to report a major repair for my Uber vehicle and was getting nowhere with the standard IRS phone system. Claimyr actually worked - they navigated the IRS phone tree for me and called me back when they had an agent on the line.

0 coins

Emma Johnson

•8M

No secret backdoor - they use technology to continuously call and navigate the IRS phone system for you, instead of you having to wait on hold. Their system knows how to respond to all the automated prompts and waits in the queue so you don't have to. I was skeptical too! But it genuinely works. The system keeps trying different IRS phone numbers and times of day that statistically have shorter wait times. When they finally get through to a human agent, they call you and connect you. It's basically just automating the frustrating part of calling the IRS.

0 coins

Astrid Bergström

•8M

Ok I need to publicly eat my words. After my skeptical comment yesterday, I actually tried https://claimyr.com this morning out of desperation. I've been trying to get an answer about my rideshare repair deductions for WEEKS. They got me connected to an IRS agent in about 27 minutes. The agent confirmed that for my situation, I could deduct the business percentage of my repair costs if I use the actual expense method, but needed to switch methods for the whole year. Got all my questions answered and now I can finally finish my return. Sorry for doubting!

0 coins

PixelPrincess

•8M

I'm a tax preparer and work with several rideshare drivers. Here's my general advice: 1. Standard mileage rate vs. actual expenses is a year-by-year choice, but with some restrictions. If you used standard mileage in the first year, you can switch between methods in later years. But if you used actual expenses the first year, you're locked into that method for that vehicle. 2. For major repairs like a transmission, if using actual expenses, you generally deduct the business-use percentage in the year incurred. 3. Keep detailed records! The IRS loves to audit Schedule C deductions, especially for rideshare drivers.

0 coins

PixelPrincess

•8M

You're not locked in forever. If you used standard mileage in the first year of business use, you can switch to actual expenses in a later year. But if you start with actual expenses in the first year, then yes, you're stuck with that method for the life of that vehicle. Many drivers start with standard mileage because it's simpler and preserves flexibility. Then in a year with major repairs, they can evaluate if switching to actual expenses would be more beneficial. Just remember that if you switch to actual expenses, you can't go back to standard mileage for that same vehicle.

0 coins