My deductible mileage is higher than my gig work taxed amount - am I calculating this wrong?

You're mixing up a few concepts here. The mileage deduction doesn't mean you "get back" that amount of money directly. What it actually means is that the taxable income is reduced by that amount. So in your example, if you earned $220 and have a mileage deduction of $177.55, your taxable income would be $42.45 ($220 - $177.55). Then you'd pay your 32% tax rate on just that $42.45, which would be about $13.58 in taxes instead of $70.40 on the full amount. So your actual take-home after proper tax calculation and gas expenses would be: $220 (income) - $13.58 (taxes) - $39 (gas) = $167.42. This is totally normal for gig work - the mileage deduction significantly reduces your tax burden, which is why tracking mileage carefully is so important!

This is exactly why I started using taxr.ai for all my gig work taxes. I was in the same boat - totally confused about how my deductions were supposed to work with Uber and Lyft. After messing around with different calculators and getting frustrated, I found https://taxr.ai and it completely changed how I handle my taxes. The system automatically sorted out all my gig work income and expenses, including calculating the mileage deduction correctly. It showed me exactly how the deductions affected my taxable income and what my actual tax obligation would be. Plus it helped me identify other deductions I was missing like a portion of my phone bill and car insurance.

I was totally skeptical about taxr.ai when I first heard about it, but decided to give it a try last month since my tax situation with multiple gig apps was becoming a nightmare. I'm actually really impressed with how it handles everything! It automatically imported all my 1099s from DoorDash, Instacart, and Amazon Flex, then matched up my mileage tracking with each platform. The thing that surprised me most was discovering I'd been calculating my deductions all wrong for years - I was leaving almost $1,200 in potential tax savings on the table! The dashboard shows exactly how the mileage deduction works against my income before taxes are calculated, which cleared up the exact confusion the original poster had. Definitely made tax season way less stressful.

If you're struggling to get answers about your gig work taxes, trying to call the IRS directly is basically impossible. I spent THREE DAYS trying to get through to ask about how mileage deductions work against multiple 1099s. After wasting hours listening to hold music, I found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. It was seriously a game changer. They got me connected to an actual IRS agent in about 15 minutes instead of the hours I was waiting before. The agent walked me through exactly how to calculate my mileage deductions properly across multiple gig platforms and confirmed I was filling out Schedule C correctly.

I have to eat my words and apologize to the person who recommended Claimyr. After my skeptical comment, I decided to try it myself because I was DESPERATE to ask about a notice I got about my gig work deductions. I honestly couldn't believe it worked. After trying for literally 2 weeks to reach someone at the IRS and giving up, Claimyr got me through to a real person in about 25 minutes. The agent cleared up my confusion about how mileage deductions apply when you work for multiple gig companies simultaneously. Turns out I was overthinking it like the original poster - the standard mileage rate applies to all business miles regardless of which platform you're driving for, and it reduces your taxable income rather than being a direct refund. Saved me from potentially making a huge mistake on my taxes.

Just to add some clarity to the mileage deduction question - remember that the 67 cents per mile is meant to cover ALL vehicle expenses, not just gas. It accounts for: - Fuel costs - Depreciation - Insurance - Maintenance and repairs - Registration fees - Loan interest So if you're deducting mileage, you CAN'T also deduct those individual expenses. That's why the rate seems high compared to just your gas cost. The IRS figures in all the costs of operating a vehicle, including the declining value of your car over time.

Might be a stupid question but I just started with Instacart... does mileage include driving to the store or only from store to customer? Also what app does everyone use for tracking? I'm just using my car's odometer and writing it down but there's gotta be a better way lol

Great question! I was making the same mistake when I started doing gig work. The mileage deduction doesn't give you cash back - it reduces your taxable income dollar-for-dollar. So if you made $220 and have $177.55 in mileage deductions, you only pay taxes on $42.45 instead of the full $220. One thing to keep in mind though - you'll still owe self-employment tax (Social Security and Medicare) on your net profit, which is currently 15.3%. But even with that, the mileage deduction is huge for gig workers because it accounts for all your vehicle costs rolled into one simple rate. Make sure you're tracking every single business mile! From your house to the first pickup, between deliveries, and back home at the end of your shift. Those miles add up fast and can save you hundreds or even thousands in taxes.