A Complete Guide to Your Postmates Taxes

If you’re deducting vehicle mileage, you can use the standard mileage method which is the simpler option, or the actual expenses method which takes a bit more math and record-keeping. A tax pro can help you assess your situation and pick the method that gives you the biggest deduction. Let's say you're a Postmates driver who uses your vehicle for deliveries. Throughout the year, you keep meticulous records of your mileage, noting every trip you make while delivering orders. At tax time, you realize you can claim a deduction for these mileage expenses. Say you drove a total of 10,000 miles for deliveries over the year. Using the standard mileage rate set by the IRS, which is $0.67 in 2024, you calculate your deduction. Multiplying the total miles driven by the standard rate, you find that you can deduct $6,700 from your taxable income. But what if you want to make sure you're getting the biggest deduction possible for your efforts? You might decide to try out the actual expense method to compare deduction amounts. Throughout the year, you keep detailed records of all vehicle-related expenses. At tax time, you gather your receipts and calculate the total amount spent on these deductible expenses. Say you spent $3,000 on gas, $1,500 on maintenance, $1,200 on insurance premiums, $300 on registration fees and $2,000 on depreciation for your vehicle used for deliveries. Adding these expenses together, you find that you can deduct a total of $8,000. The actual expenses method does require more calculation but it can be a worthwhile effort for Postmates drivers who use their car a lot for work. It's pretty clear if you're using the standard mileage method, but it's worth noting that if you're deducting mileage, you need to keep a record of the miles you drive. While you might feel tempted to estimate the miles when you file, it can be risky if the IRS ever asks you to show them proof. To deduct your cell phone bill costs for business, you'll need to determine the portion used for work. For example, if you use your phone for work 46% of the time in a month, you'd deduct 46% of your monthly bill. Figuring out this business percentage might seem tricky, but it's doable. Start by examining an average week or month. Review your calls, texts, and data usage during that period to gauge the percentage of calls and texts related to work, the portion of data used for work, and when and how frequently the phone is used for work. Once you've established the business percentage for that period, you can apply it to your phone bill costs for the entire year. This method helps streamline the process of determining your deductible bill percentage, saving you valuable time.