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The Ultimate Tax Guide

The Ultimate Tax Guide for Delivery drivers

Delivery drivers save thousands with this tax guide

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Learn all about delivery driver taxes

List of all possible deductions

Tools to automate your taxes

How Do I Keep Track of Mileage For Taxes?

Let's talk about mileage tracking—it's like the backbone of any business that depends on wheels. When you're diligent about recording and reporting your mileage accurately, you're not just boosting your tax returns. You're also keeping the IRS happy and gathering solid data for budgeting and insurance needs. Now, here's the kicker: to make all this mileage tracking work, you have to keep records to back up your deductible mileage claims. So every year, delivery drivers and self-employed individuals use all sorts of tools, from old-school logs to mobile apps to shave down their taxable income with mileage deductions. Every single trip and mile driven for business purposes needs to be accounted for. And sometimes, you even have to record the nitty-gritty expenses like gas, parking and repairs to get the tax deduction. So, to help you stay on top of it all and run your business smoothly, we're here to guide you through the best mileage-tracking methods.

Table of contents

What’s the difference between commuting and business miles?...Read more

How to track mileage for a tax deduction...Read more

Latest IRS mileage rates...Read more

Are there penalties for misreporting mileage on your taxes?...Read more

What’s the difference between commuting and business miles?

Commuting and business miles might seem similar, but in the eyes of the IRS, they're two different concepts. Commuting miles are the ones you rack up driving to and from your workplace. Say you wake up, grab your coffee, hop in the car and head straight to your workplace. Those miles are commuting miles. Even if you swing by the dry cleaners or grab a breakfast burrito on the way, as long as you're headed to your usual work spot, it's all commuting. Business miles are the miles you drive for work-related stuff outside of your regular workplace. Think meetings with clients, trips to the bank for your business or running to grab supplies for a project. Remember, commuting miles aren't tax-deductible. The IRS won't give you a break for all those back-and-forth trips to your job. However, business miles are seen as a cost of doing business, so you can deduct them from your taxes. So, next time you're hitting the road, keep track of whether you're commuting or doing business. But what if you work from home? In that case, any trips you make from your home office to a workspace or client site are commuting miles. Say you're a freelance graphic designer and you zip over to a client's office to discuss a new project—those are commuting miles. If you decide to run some work-related errands before going home, those miles are business miles.

How to track mileage for a tax deduction

Infographic entitled What To Record in A Mileage Log Book showing an easy way to track mileage for taxes.

With a mileage logbook

Latest IRS mileage rates

Every year, the IRS issues a new standard mileage deduction rate, and in 2024 it is $0.67. Using the standard mileage method, you can calculate your mileage expenses. The more you drive for business, the higher your costs get, which lets you take a larger deduction and lower self-employment taxes.
 Infographic copy IRS Mileage Rate showing the latest mileage rates for freelancers tracking mileage for taxes.

Actual expenses method

Are there penalties for misreporting mileage on your taxes?

If you overestimate your tax write-offs without giving proper proof, the IRS can require you to pay a penalty. In the case of mileage tax deductions, they are usually for accuracy-related penalties. If your total mileage with proper proof is 5,000 miles for the year, but your actual mileage was 9,000, you can only claim a deduction for 5,000 because that's what you have proof for. If you file for deductions using 49,000 miles anyway, the IRS will issue a "Negligence or Disregard of the Rules or Regulations Penalty." According to the IRS, negligence or disregard happens when taxpayers carelessly, intentionally or recklessly ignore tax rules and regulations. The penalty for negligence is 20% of the underpayment amount and interest on the total amount for each month you delay the payment. Imagine you're a small business owner who's been logging your business-related mileage but haven’t paid much attention to the specific rules and regulations governing mileage deductions. You've been jotting down miles without proper documentation or justification, assuming it's all fine as long as it helps your bottom line. However, when the IRS decides to review your mileage deductions, they notice that many of your recorded miles don't align with the requirements outlined in the tax code. You've been a bit careless about keeping detailed records, and some of the trips you've claimed aren't considered legitimate business-related under IRS guidelines. As a result, the IRS hits you with the negligence or disregard of the rules or regulations penalty. This penalty could be a percentage of the underreported taxes based on inaccurate mileage claims, and it could add up to a significant amount.

Uber and Lyft

Uber taxes are crucial to understand when you work for a rideshare company, so that you can avoid any tax penalties and save on taxes by making deductions.

Amazon Flex

One way freelancers are taking advantage of the explosion in gig work opportunities is with Amazon Flex.

Postmates

Filing quarterly taxes as a freelance delivery driver for Postmates is a massive task. Read about the Postmates 1099-NEC, the 1099-K and the Schedule C here.

Doordash

Doordash taxes are important for drivers who work for the company to understand, in order to save on taxes and avoid penalties.

Instacart

Instacart delivery drivers are responsible for paying taxes on their income and need the right information about every Instacart tax form.

Grubhub

How much do Grubhub drivers pay in taxes? Here's everything you need to save on taxes and avoid penalties.

Uber and Lyft

Uber taxes are crucial to understand when you work for a rideshare company, so that you can avoid any tax penalties and save on taxes by making deductions.

Amazon Flex

One way freelancers are taking advantage of the explosion in gig work opportunities is with Amazon Flex.

Postmates

Filing quarterly taxes as a freelance delivery driver for Postmates is a massive task. Read about the Postmates 1099-NEC, the 1099-K and the Schedule C here.

Doordash

Doordash taxes are important for drivers who work for the company to understand, in order to save on taxes and avoid penalties.

What’s FlyFin?

FlyFin is the #1 A.I.-powered tax app for freelancers, gig workers, independent contractors and sole proprietors. FlyFin tracks all your business expenses automatically using A.I. to find every possible tax deduction. Then, our CPA team files a guaranteed 100% accurate tax return for you – to save you a couple of thousand dollars and a ton of time on your taxes. Download the FlyFin app and have your taxes filed in less than fifteen minutes, saving more money on your taxes than last year, guaranteed.
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