What deductions can I take as a Rideshare driver (Uber, Lyft, etc.)?

As an independent Uber, Lyft or taxi driver, you are considered a contractor and responsible for paying your own taxes and keeping your own records. When it comes to your vehicle, there are some deductions you don't want to miss out on 

Here are a few that can be reported under the Schedule C menu: 

• Auto Expenses - You have the option of claiming the Standard Mileage Rate or the Actual Expenses for your vehicle. You must maintain a log to claim either the Standard Mileage rate or Actual Expenses.
• If you lease your vehicle, you can deduct a portion of the lease payment on your return as a General Expense > Leased Property. You must prorate the payment based on the business use. Reporting - General Expenses > Rent or Lease of Property
• If you own your vehicle, you can take a depreciation deduction. Reporting - Depreciation
• Since this is an on-call type service, your cell phone is an important part of your business. You can deduct the portion related to the business. If you have a dedicated cell phone for the business, you can deduct the entire amount. 
• Like your cell phone, your wireless plan is deductible to the extent it was used for business. 
• Self-employed individuals who rely on their vehicle can deduct part of the interest expense allocated to the business use of the vehicle. 
• If you are able to take a deduction for your registration fee in your state, you may be able to deduct the portion allocable to the business use of your vehicle. This would be an actual expense and cannot be claimed with the Standard Mileage rate. 
• Gasoline can be deducted as an Actual Expense (not applicable if you claimed Standard Mileage Rate Deduction). Based on the business use of your vehicle. 
• Auto Insurance can be deducted as an Actual Expense (not applicable if you claimed Standard Mileage Deduction). Based on the business use of your vehicle. 
• Food and drinks provided to your clients is deductible on your return. You can only deduct 50% of the cost.
• Your vehicle is your business and you need to keep it looking good. Car Washes would be considered an ordinary expense for your business. 
• If you purchased a AAA or similar membership because of your business, it is considered an ordinary expenses for your business. 
• Parking Fees and Tolls incurred while working are considered to be an ordinary expense for your business.
• Maintenance - as an Actual Expense (not applicable if you claimed Standard Mileage Deduction). Based on the business use of your vehicle. Includes oil changes, tires, inspections, brakes, anything else required to keep vehicle in good running condition. 

As with all deductions, don't forget to keep good records and receipts for all of your purchases. If your receipt is not detailed, be sure to make a note of the purchase date and items purchased in case the IRS requests more information.

Generally, the IRS requires a mileage log to be kept detailing the business and total miles driven. Also note the date, destination and business purpose.

Program Entry

Your automobile expenses are reported on your Schedule C in different ways. Refer to the information following each expense to determine where to report the expense. Within the program, report the  general expenses by going to: 

1. Federal Section
2. Income
3. Profit or Loss From Business
4. General Expenses

To report actual vehicle expenses go to:

1. Federal Section
2. Income
3. Profit or Loss From Business
4. Depreciation
5. Assets
6. Listed Property

See also Schedule C - Expenses and Publication 463