Expenses

Top deductions for delivery drivers

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Whether you’re a Dasher, a Postmate, or any other type of delivery driver or shopper (Instacart, Shipt, Wonolo, Caviar, UberEATS, etc.), you’re an independent contractor. As an independent contractor, paying your taxes can be harder than as an employee – for example, you need to make tax payments every quarter. But there’s also a key benefit: as an independent worker, there are lots business deductions you’re entitled to take. Taking those deductions reduces your taxes and increases how much money you get to keep.

To maximize your deductions, and therefore maximize the money you keep, you need to understand the types of deductions you can take.

We’ve developed a list of the most common deductions that couriers and other on-demand delivery workers can take.

Overview of the most common deductions for couriers

Here is an overview of the most common deductions for couriers (whether you deliver for DoorDash, PostMates, Caviar, UberEATS, etc).

Expenses related to your ride: cars, Scooters, bikes, etc.

  • Standard mileage rate OR actual expenses (e.g. gas, rental fees, maintenance, etc.)
  • Tolls and parking
  • Inspections, roadside assistance

Other business expenses:

  • Phone + accessories (car charger, car mount, etc)
  • Health insurance
  • Hot blankets, hot bags, and courier backpacks
  • Everlance subscription

Expenses related to your ride: cars, Scooters, bikes, etc.

If you drive a car (or a motorcycle) for work, you have a choice of how to deduct your car-related expenses: standard mileage method or actual expenses method. With both methods, you’ll need to keep track of the miles you drive for work vs. personal.

Tip: Using the standard mileage method often gives a higher deduction than the actual expenses method. And it’s way easier (you don’t have to keep gas and maintenance receipts in addition to a mileage log).

If you ride a Scooter, e-bike, or bicycle, you can only use the actual expenses method. You’ll need to keep track of the miles you drive for work vs. personal.

Standard mileage method (cars and motorcycles only):

  • Track your work vs. personal miles.
  • Multiply your total number of work miles by the IRS standard mileage rate ($0.535 for your 2017 taxes), and that gives you your deduction.
    • Example: If you drove 1,000 miles for work in 2017, you’d get $535 deduction.

Note: The motorcycle rate in 2017 was $0.505.

Actual expenses method (all types of rides):

  • Track your work vs. personal miles.
  • Calculate the % of your total driving that was for work.
    • Example: If you drove 1,000 miles for work and 2,000 miles for personal in 2017, your % of driving for work was 33%.
  • Add up your expenses for:
    • Gas
    • Registration and licenses fees
    • Maintenance
    • Repairs
    • Insurance
    • Interest on a car loan
    • Depreciation
    • Rental fees (if you rent)
  • Multiply the % of driving for work by the actual expenses.
    • Example: If your total actual driving-related expenses in 2017 were $10,000, and your % of driving was for was 33%, your deductible driving-related expenses would be $3,300.

Other driving-related expenses: tolls, parking, roadside assistance, and inspections

Good news – whether you use the standard mileage method or the actual expenses method, you can also deduct the following when they are related to your work:

  • Tolls (just make sure you are not already being reimbursed by your work.)
  • Parking
  • Roadside assistance, and work-related inspections, so even if you use that method, you can still deduct your tolls and parking expenses for work!

Phone, phone plan, and accessories

As a courier, you can’t do your job without phone, lots of data, and some vital accessories. For example, if you drive for work, a car charger and phone mount are essential and would be deductible. But be careful – if you use this for work and personal, you can only deduct the “work percentage.”

For example, if you use your phone for personal 70% of the time, and work 30% of the time, you’d deduct 30% of your phone and related expenses.

Insulated bags and blankets

Whether you’re keeping food or cold, insulated bags and blankets vital for your job, aren’t they? That means they are deductible! (As with anything else, if you use them for personal too, you should only deduct the “work portion” of the expenses.)

Health insurance

This can be a tricky one, so be sure to check with your tax professional or the tax software provider you use. If you’re eligible for healthcare through your spouse’s employer, you won’t be able to claim those write-offs.

Not deductible

Of course, there are also things that are generally not deductible. Two examples are parking tickets and traffic violations

 

Disclaimer: the above is written in general guidance and does not constitute professional tax or legal advice.

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