If you deliver for an on-demand delivery service and aren’t a full or part-time employee, you're an independent contractor and can claim the below tax deductions.
Mileage you can deduct
On the way to first pickup
Miles driven in search of your first pickup, and the miles driven from your last dropoff back home, are tax deductible.
During and between deliveries
Miles driven with the delivery item in your car or between item pickups are tax deductible.
Work-related errands
Miles driven on your way to get a license or registration, or to purchase supplies you need to do your job, or other work-related errands are tax deductible.
Expenses you can deduct
Phone & Service
If you have to use a phone for work, you can deduct the percentage of the purchase price and monthly service bill that reflect your work usage!
Hot Bags & Blankets
If you're delivering food, the insulated bags and blankets that you use to keep orders warm are deductible! Same goes for coolers to keep food fresh or frozen.
Tolls
Any toll fees that you pay while working are tax deductible! Just make sure they're not already being reimbursed.
Parking
If you have to pay for parking while you're working, that's tax deductible. Unfortunately, parking tickets, traffic violations, and speeding tickets are not.
Phone Accessories
Phone accessories that help you do your job as an independent driver, like car chargers, cables, and phone holders, are all tax deductible.
Software Subscriptions
If you pay a monthly fee for a software subscription that helps you do your job, that's deductible!
Inspections
Vehicle inspections and background checks that are required for work are deductible. These keep your business compliant and your passengers safe!
Roadside Assistance
Staying safe on the road is part of the job. A percentage of the fees for AAA or other roadside assistance programs are tax deductible based on the percentage of miles you drive for work.
Health Insurance
If you're self-employed and don't have the option to buy health insurance through an employer or spouse, you can deduct your monthly health insurance payments!
Supplies
If you purchase supplies that are needed to run your business, those expenses are deductible! Just make sure these purchases would be considered typical for your industry.
Personal Protective Equipment
Hand sanitizer, gloves, face masks, and other safety items are essential right now for anyone actively working in the face of the COVID-19 pandemic.
Other
Any expense that doesn't fit the other categories we've set up for you. Please make sure to add a note to keep track of them!
Other expenses you can deduct
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Sign up nowNon-Deductible Expenses
Clothing
Clothing that can be reasonably worn outside of your work environment is considered a personal hygeine expense and is explicitly deemed a non-deductible expense.
Haircuts
A haircut is considered a personal hygiene expense and is explicitly deemed a non-deductible expense for independent workers.
Life Insurance
You can't deduct the cost of premiums for life insurance where you are the beneficiary. This includes taking policies out to secure a loan for your business, or to fund a succession plan.
Parking Fines and Tickets
Misconduct isn't part of your job! Fees for legal violations, such as parking tickets or court fees, are not tax deductible.
Commuting
If you have a permanent office from which you conduct your business then the miles driven between your home and that office are considered commuting and are not tax deductible.
Dry Cleaning
Dry cleaning is considered a personal hygiene expense and is therefore explicitly deemed a non-deductible. Unless you're cleaning a uniform, the expense is considered personal.
Non-Deductible Expenses if You Take the Standard Mileage Deduction
Gas
Gas is part of maintaining a vehicle for business and is deductible only if you choose not to take the standard mileage rate.
Oil Change
An oil change is standard car maintenance and is deductible only if you choose not to take the standard mileage rate.
Car Insurance
Car insurance is required for all car owners and thus is deductible only if you choose not to take the standard mileage rate.
Car Repairs
All cars will eventually need a repair. Repairs are deductible only if you choose not to take the standard mileage rate.
Car Lease Payments
If you are leasing a car, you can deduct the lease payments only if you choose not to take the standard mileage rate.
Car Depreciation
Car depreciation is deductible only if you choose not to take the standard mileage rate.
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