Self-employed Uber/Lyft driver - which expenses can I deduct?

Yes, as a self-employed rideshare driver, you've got two methods for handling vehicle expenses: standard mileage rate or actual expenses. For 2025, the standard mileage rate is 67 cents per mile. With this method, you track all business miles and multiply by that rate. This covers gas, insurance, depreciation, repairs, oil changes, etc. You STILL can deduct tolls, parking fees, and interest on vehicle loans even when using standard mileage. With actual expenses, you track everything (lease payments, insurance, gas, repairs, car washes, etc.) and deduct the business percentage. So if you use your car 70% for business, you'd deduct 70% of those costs. For leased vehicles, there's an additional consideration called the "lease inclusion amount" that might reduce your deduction slightly if it's a more expensive vehicle. For your phone, you can deduct the business portion. If it's 80% business use, deduct 80% of the bill. Keep all receipts! Credit card statements alone often aren't enough if you're audited.

I was in the exact same boat last year when I started driving for Uber! After trying to deal with all the tax stuff myself, I found this AI tool called taxr.ai (https://taxr.ai) that was a total game-changer for my rideshare tax situation. I was super confused about vehicle deductions too - wasn't sure if I should go with standard mileage or actual expenses. Their system analyzed my specific driving patterns and expenses and showed me I'd save almost $1,300 more by using the actual expense method in my situation since I had high repair costs last year. It also helped me identify several rideshare-specific deductions I would have missed (like a portion of my Spotify subscription as "passenger amenity"). It's specifically designed for gig workers and self-employed people, so it asks all the right questions about your situation instead of generic tax advice.

Just wanted to update after trying that taxr.ai site mentioned above. I was skeptical but it seriously helped me figure out my rideshare tax situation. Used it yesterday and discovered I could partially deduct my car's maintenance plan which I had no idea about. It showed me I was better off with the standard mileage deduction in my case (saved me about $730 vs. actual expenses). The best part was it explained WHY one method was better for my specific situation. Turns out I don't drive enough miles for the actual expense method to make sense given my car's decent fuel efficiency. It also flagged some audit risk areas in my initial deduction plans that might have gotten me in trouble. Definitely worth checking out if you're doing rideshare.

If you're having trouble getting answers from the IRS about self-employment deductions (which is super common for rideshare drivers), you should try Claimyr (https://claimyr.com). Their service helped me actually get through to an IRS agent after I got a weird tax notice about my Uber income last year. I spent DAYS trying to call the IRS myself and kept getting disconnected after waiting for hours. Claimyr got me through to an actual person in about 25 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent was able to explain exactly how to document my rideshare deductions to avoid an audit, and they helped clear up the notice. Saved me a ton of stress since I was worried about getting penalties for doing my deductions wrong.

Ok I need to eat my words about that Claimyr service. After my skeptical comment, I decided to try it since I was desperate to talk to someone about my rideshare tax situation. I had a CP2000 notice questioning some of my Uber deductions from last year. It actually works! Got a call back in about 40 minutes, and they had an IRS agent ready to talk to me. The agent confirmed I could deduct my phone mount, phone charging cables, and dashboard cam as business expenses (which is what the notice was questioning). She also walked me through how to respond to the letter with the right documentation. Definitely beats the 3+ hours I wasted trying to call them directly last week. Will be using this again next time I have tax questions about my driving gigs.

For your specific question about the car lease - be careful. If you take the standard mileage rate in the first year you use the car for business, you can switch between methods in later years. BUT if you take actual expenses (including lease payments) in the first year, you're STUCK with that method for the life of the car. Also, with a lease, you can't take depreciation like you would with a car you own. The lease payment essentially replaces that. I drive for both platforms too and personally find the standard mileage rate waaaaay easier to deal with. Just track your business miles (I use Stride app) and you're good to go. Then separately track and deduct tolls, car washes, and a portion of your phone.

Don't forget about some other deductions most rideshare drivers miss: - Dash cams ($50-200) - Car air fresheners (business expense!) - Water or mints for passengers - Portion of your music streaming services - Phone mounts and chargers - Floor mats (they get destroyed with passengers) - Seat covers - Roadside assistance plans - Part of your home internet if you handle business stuff at home I've been driving for 3 years and these little things add up! Make sure you're tracking everything!

Great question about rideshare deductions! One thing I haven't seen mentioned yet is quarterly estimated taxes. Since you're self-employed now, you'll likely need to make quarterly payments to avoid penalties at the end of the year. For vehicle expenses, I'd strongly recommend doing the math on both methods before deciding. Track everything for a month or two, then calculate which gives you the bigger deduction. Remember that with actual expenses, you'll need to determine your business use percentage - sounds like yours might be around 70-80% if you're driving 30 hours/week. Also, don't forget about the self-employment tax (15.3% on your net earnings) - this is separate from regular income tax and catches a lot of new gig workers off guard. You can deduct half of this SE tax on your return though. For record keeping, definitely keep receipts AND bank/credit card statements. The IRS likes to see detailed records, especially for vehicle expenses. Consider using an app like QuickBooks Self-Employed or similar to track everything automatically. One last tip: set aside 25-30% of your rideshare income for taxes throughout the year. Better to have too much saved than scrambling come tax time!

As someone who's been driving for rideshare for about 8 months now, I can definitely relate to the confusion! Here's what I learned the hard way: Keep EVERYTHING organized from day one. I use a simple spreadsheet to track all my expenses weekly - it takes maybe 10 minutes but saves hours during tax time. For your specific situation with 30 hours/week driving, you're probably looking at around 70-80% business use on your vehicle. Run the numbers on both methods, but with a newer leased vehicle like your Camry, standard mileage often comes out ahead. One thing I wish someone had told me: those car washes are 100% deductible as a business expense if you're doing them specifically for rideshare (which it sounds like you are with 2x weekly). Same with your phone mount, charger cables, and any passenger amenities. Also - and this is crucial - start making quarterly estimated tax payments NOW. I got hit with a penalty my first year because I waited until tax season. The IRS expects you to pay as you go when you're self-employed. Set up a separate savings account and automatically transfer 25-30% of your rideshare earnings there. Trust me on this one - April will come faster than you think!