Uber and Lyft driver tax deductions (2026)

Rideshare drivers are independent contractors, so Uber and Lyft don’t withhold any tax. The good news is that the deductions are large. For many drivers, mileage alone cancels out a big share of their earnings.

Start with the right income number

Your 1099-K (if you get one) and your yearly tax summary show gross fares. That total includes money Uber or Lyft kept, like the service fee and booking fees. Report the gross, then deduct those fees as an expense. Otherwise you pay tax on money you never received.

Use the tax summary even if no 1099-K arrives. Under the current federal rule, a 1099-K is only sent above $20,000 and 200 transactions, but all of your earnings are taxable either way.

The big one: mileage

For 2026 the IRS standard rate is 72.5¢ per mile through June 30 and 76¢ per mile from July 1. That rate covers gas, repairs, tires, insurance and depreciation, so you don’t deduct those separately.

Miles that generally count:

• driving with a passenger,
• driving to pick up a passenger,
• driving between trips while you’re logged in and working.

Keep a log with dates. The summary’s “online miles” is a useful starting point, but your own records are what back up the deduction. The mileage calculator handles both 2026 rates.

Other common deductions

Expense	Deductible?
Uber/Lyft service and booking fees	Yes
Tolls and parking while working	Yes, on top of mileage
Phone and data plan	Business-use share
Phone mount, chargers, dash cam	Yes
Water, gum and snacks for riders	Yes
Car washes and detailing	Only with actual expenses, not the standard rate
Rideshare insurance add-on	Only with actual expenses
Car loan interest	Business-use share, with either method
Tax prep fees for your business	Yes

The tips deduction

For 2025 through 2028, rideshare drivers can deduct up to $25,000 of qualified tips from income tax. Self-employment tax still applies to them. See what the tips deduction covers.

Common mistakes

1. Paying tax on Uber’s fees, by reporting the gross without deducting them.
2. Deducting gas as well as mileage. It’s one or the other.
3. No mileage log. Without records, a large mileage deduction is hard to defend.
4. Skipping quarterly payments. If you’ll owe $1,000 or more, pay during the year. Here are the due dates.

Run your numbers in the Uber or Lyft tax calculator.