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Rideshare Driver Tax Guide 2025 – Deductions, 1099-K/1099-NEC & Mileage
Rideshare drivers are generally treated as independent contractors. That means you report your own income, track expenses, and pay self-employment tax on your net profit. This guide highlights how to report income, what you can deduct, and the records you should keep.
How Your Income Is Reported
- Schedule C (Form 1040): Report rideshare income and deductible expenses to calculate net profit or loss.
- Schedule SE: If net profit is $400 or more, compute self-employment tax.
- Form 1099-K: Platforms often report gross fares/fees they processed on your behalf.
- Form 1099-NEC: Bonuses, incentives, or referral payments may be reported here.
Tip: Always reconcile platform statements with your own records so your reported income is complete and accurate.
Mileage vs. Actual Car Expenses
You can generally deduct vehicle costs using one of two methods:
- Standard mileage rate (2025): 70.0¢ per business mile. Keep a mileage log (start/end odometer, date, purpose).
- Actual expenses: Track and deduct the business portion of gas, oil, insurance, repairs, tires, registration fees, licenses, lease or depreciation, parking, and tolls.
Compute both methods to see which yields a larger deduction (subject to IRS method-switching rules). You can also deduct a business portion of car loan interest and personal property taxes when applicable.
Other Common Deductible Expenses
- Service/platform fees withheld from fares
- Cell phone and data (business percentage)
- Refreshments provided exclusively to riders (subject to a 50% meals limit)
- Supplies such as cleaning items, car mats, and phone mounts
- Professional services (e.g., tax prep)
Recordkeeping Essentials
- Mileage log (all business miles—not just trip miles)
- Platform statements and payout reports
- Receipts for car expenses, supplies, phone, and fees
- Bank statements or digital payment reports
Estimated Taxes & Planning
Because taxes aren’t withheld from rideshare income, consider making quarterly estimated tax payments. Proper planning can help you avoid underpayment penalties and cash-flow surprises at filing time.
Download the Rideshare Driver Taxes 2025 Guide or contact us to get help maximizing deductions and staying compliant.