2024 Gig Driver Tax Guide

*Gridwise does not provide tax, legal, or accounting advice. This material has been prepared for information purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before filing your return.

Just when you thought winter was over, a blizzard of information about how to pay taxes comes flying at you. While much of the information is useful, it can be hard to plow through. That’s why we’ve created this tax guide. Simply scan the topics and get the info you need right now, at crunch time, without having to scroll through an intimidatingly long roll of hard-to-decipher text.

Here’s a list of resources and topics you can start with:

Delivery and rideshare tax strategies

The way that the government taxes freelance workers is different from the way taxes are levied on employee wages and investments. That’s why you need strategies. When it comes to filing tax for Uber drivers and delivery workers, and calculating tax for Lyft drivers, the name of the game is keeping as much of your earnings as possible. Here are some strategies we suggest:

• Get educated about freelancer tax deductions
• Prepare your taxes ahead of time
• Make use of tax deductible investments
• Set up a system for recording your expenses as they occur
• Learn about quarterly tax payments
• Know when to ask for help

If you would like more information about tax strategies, check out this Gridwise blog post.

This post tells you about the mileage rate increase, and discusses how to pay quarterly tax estimates. 

All about deductions: Tax write-offs for Uber drivers and other gig workers

Keeping the biggest share possible of your earnings is easy when you know what you can deduct, and the best ways of doing so. Your delivery or rideshare gig is a business, so many of the costs you encounter in the course of operating your gig can be deducted from your taxable income. We’ll list a few of them here.

• automotive expenses (use either the standard IRS mileage deduction rate, or, after your first year, the actual cost method)
• equipment (phone, dashcam, floor mats, seat covers, etc.)
• any extra delivery bags or containers you might purchase
• extra services and amenities (e.g. satellite radio or bottled water for passengers)
• business tools (computer, software, home office equipment)
• accounting and legal help
• apps you use to support your driving gig

There is more help coming your way from these Gridwise articles about delivery and rideshare taxes and deductions. They show you how to reduce Uber taxes, offer Lyft tax relief, and help to minimize the tax bills of delivery drivers.

Read this blog post to discover how important it is to maximize your deductions. 

Learn even more details about the tax write-offs you can use to your advantage in this post.

To make sure all your bases are covered, read through these FAQs about driving for delivery, Lyft, or Uber, and tax deductions.

Lyft, delivery, and Uber driver accounting: Tracking your expenses

Isn’t it enough to have to pay attention to the apps you’re using, be on top of traffic and weather, deliver food through apartment building labyrinths, and keep your driver ratings high? Tracking expenses might sound like an unnecessary hassle, but in truth, it will save you a ton of money.

This Gridwise blog post enumerates the expenses you will need to keep track of to help keep your Lyft and Uber taxes to a minimum. There are things you do every day in the course of executing your driving gig that can be charged as an expense of doing business. And yes, it can seem cumbersome to keep track of them all. 

Fortunately, there is a tool you can use to help you record your expenses. Gridwise helps you keep track of important expenses, from the mileage you rack up while on your driving gig to the tissues you keep for your passengers’ convenience.

When you log on to Gridwise at the beginning of your driving shift, the app

• automatically tracks your earnings for each delivery or driving app you use
• instantly logs the miles you drive on your shift
• offers you space to record your everyday expenses with simple entries 
• provides a way to scan receipts through Gridwise Tax Help with Keeper Tax
• exports the information into .csv file format, so you can easily send it along to tax preparation apps and software

The Expense Tracking feature on the Gridwise app is super easy to use. Simply tap on “Expenses” in the Earnings section. From there, click on the “+” sign, then “Add expense.” Enter the date, category, and amount, and the app automatically tabulates everything, storing the info until you need to report it.

The .csv export feature adds to the convenience and utility of the Gridwise Expense Tracking feature.

This Gridwise post shows how using the app to track your earnings, expenses, and mileage maximizes your earnings.

Maximize your delivery or rideshare mileage deduction with automatic tracking

We’ve mentioned that the Gridwise app automatically tracks the miles you drive on your shifts, but do you realize how important this is? If you fail to track your mileage, you’ll  miss out on a huge deduction from your taxable income. You’ll want to start using Gridwise if you don’t already—but what if you forgot or failed to record all your gig driving miles? Here are some things you can do:

• Know which miles count. You can deduct more than just the miles your driving apps record: the miles you drove getting to and from your gig also qualify. You cannot, however, count miles used for any other purpose, unless they were directly related to your rideshare or delivery work.
• Estimate your mileage based on an average gig-driving shift.
• Document the procedure you used for your estimate when you submit it to the IRS.

This Gridwise post gives more details about how to reconstruct your mileage report if you didn’t use Gridwise or record your mileage in any other way. It also shows you why tracking your mileage with Gridwise is as effective as it is simple. Here is a step-by-step guide:

1. Simply log on to Gridwise when you leave to begin your shift. You’ll capture those miles your driving apps won’t include. As you drive on your shift, just let Gridwise continue to track your miles. 
2. Be sure to log off Gridwise when you are not driving for your gig, both after your shift and at any time you stop for personal reasons in between rides or deliveries.
3. The Gridwise app will record your mileage figures. In the Earnings tab you can see your mileage deduction, based on the IRS mileage compensation rate.

Are you worried what might happen if you forget to log on or sign off Gridwise at the right times? Don’t be. You can always enter mileage manually, so you will continue to keep accurate records that will save you money.

• Read more about what you can do if you forget to track your miles in this Gridwise post.
• This Gridwise article discusses the 2023 IRS mileage rate and what it means to drivers.

Delivery, Lyft, and Uber tax help: Advice on calculations and compliance

When it comes to tax compliance, independent contractors carry a lot of responsibility on their shoulders. You might think you’re not “important” enough to be noticed, should you fail to submit your tax return in a way the IRS will accept and approve, but you might be surprised. The IRS looks at the returns of independent contractors with greater scrutiny than they might use with a company employee, because they expect gig workers are going to try to use every loophole they can, and possibly invent a few more. 

You do not want to know what being audited by state or federal tax authorities would do to your life. Rather than being on the road making money, you’ll be pulling out copies of your receipts and putting them under the nose of a not-very-cheerful agent whose job it is to find your errors and omissions.

Being audited is a costly and stressful process that is best to avoid. And, if you do try to get away with taking more deductions than you really have, or otherwise underpaying your tax bill, you could wind up paying penalties and interest, and possibly face court-related expenses—and even worse consequences. That’s one kind of expense you don’t want to have to deduct!

You probably see why it’s important to be compliant when it comes to paying your taxes. The rules are complex, and if you’re not experienced at filing taxes as an independent contractor, you could run into trouble. Fortunately, there’s help designed specifically for gig drivers.

Gridwise Tax Help supports your every need when it comes to tracking your earrings and expenses, and filing your tax returns. This unique service for drivers gives you

• access to a tax professional
• automatic receipt scanning
• automatic mileage reporting
• an automated tax deduction finder

With Gridwise Tax Help, you’ll get professional support and tons of tools to make record keeping and tax filing as easy as it gets.