If you're an independent contractor who drives for a delivery service like
Postmates or
Grubhub, or a rideshare driver for
Uber or Lyft, it's likely that the miles you drive pile up pretty high by the end of the tax year. So for you, the standard tax mileage deduction is probably the way to go, because it will save you more in mileage reimbursement taxes.
How does it work? Every year, the IRS allows you to write off a standard dollar amount for each mile you drive. In 2022, the standard business mileage rate is $0.585 in the first half of the year and $0.625 in the second half, from July to December. Why two different rates in the same year? Normally, the IRS sets a single rate for the entire year, but as gas prices went up significantly in the latter part of the year, the IRS adjusted the standard mileage rate to be a bit higher and gave workers extra tax relief.
If it's after July of 2022, and you start driving for
Amazon, you'll be able to apply that $0.625 rate. That means if you drive 2,000 miles by the end of the year, you'll have to write off $1,250 ($0.625 X 2,000) from your taxes.