If you drive for Uber, Lyft, DoorDash, or any delivery app, you've probably heard that you should track your mileage for taxes. But here's what most drivers don't realize: mileage deductions are actually better than the standard deduction you hear about on your personal taxes. They work completely differently—and in your favor.
The Two Taxes You're Actually Paying
As a 1099 independent contractor, you pay two separate taxes on your gig income:
Self-Employment Tax (15.3%) — This covers Social Security and Medicare. Unlike W-2 employees whose employers pay half, you pay the full amount yourself. This hits every dollar you earn.
Income Tax (10-37%) — This is the regular federal tax everyone pays, based on your tax bracket.
Here's the key insight: your business expenses (mileage + receipts) reduce both of these taxes.
Why This Is Better Than the Standard Deduction
You might be thinking: "But I take the standard deduction on my taxes." That's fine—and you still should. But here's what most people don't understand:
Your business deductions on Schedule C are completely separate from the standard deduction. They don't compete with each other. You get both.
The standard deduction only reduces your income tax. But Schedule C business expenses reduce your net profit—which means they also knock down that 15.3% self-employment tax that the standard deduction doesn't touch.
Real Numbers: What This Actually Means
Let's say you earned $50,000 driving for rideshare and delivery apps last year. You drove 12,000 business miles.
Your mileage deduction: 12,000 miles × $0.70/mile (2025 IRS rate) = $8,400
That $8,400 comes directly off your taxable income. Here's how the savings break down:
Self-Employment Tax Savings
Approximately $1,100–$1,300 saved (15.3% of your deduction, adjusted for SE tax calculations)
Income Tax Savings
At the 12% bracket: approximately $1,000 saved
At the 22% bracket: approximately $1,850 saved
Total Savings
$2,000–$3,000+ — just from tracking mileage properly.
And that's only mileage. Add in other business expenses—phone bills, car washes, delivery bags, insulated carriers—and you're looking at even more savings.
The Catch: You Need Documentation
Here's where most drivers lose out. The IRS requires you to keep records of your business miles. If you get audited without documentation, those deductions get denied—and you owe back taxes plus penalties.
What the IRS actually requires for mileage:
- Date of each trip or shift
- Starting and ending odometer readings (or total miles driven)
- General area or destination
- Business purpose
The IRS doesn't expect gig drivers to log every single stop—that would be burdensome recordkeeping for independent contractors. Recording your odometer at the start and end of a shift, plus the area you worked and the purpose, meets IRS documentation standards.
The Bottom Line
Every mile you drive for work is worth roughly 18–25 cents in actual tax savings (depending on your bracket). Drive 10,000 business miles? That's $1,800–$2,500 back in your pocket instead of going to the IRS.
But only if you document it. No records = no deduction. It's that simple.
The drivers who pass IRS audits aren't the ones with the fanciest GPS apps. They're the ones with dated odometer photos and a simple log. That's all it takes to keep $2,000–$3,000+ of your hard-earned money every year.
Receipt.help makes this dead simple: snap your odometer at the start and end of each shift, and the app handles the rest. Two photos, IRS-compliant records, audit-proof documentation. $4.99/month—less than the tax savings from a single shift.
Tax situations vary. This article is for educational purposes only and does not constitute tax advice. Consult a qualified tax professional for guidance specific to your situation.