This article was updated for Tax Year 2023, last edited on March 19, 2024.

As a ride-sharing service driver, you may be considered an independent contractor by the ride-sharing company and the IRS.

The IRS considers independent contractors as people who are self-employed and provide a service, with no employer having the legal right to control the details of how the services are performed. As an independent contractor, income is reported on a 1099 rather than a W-2.

However, state laws may vary as to how ridesharing drivers are classified, so please refer to your own state’s laws for more information.

Note: If you need to pay estimated taxes to the IRS, you may also need to pay estimated taxes at the state level. Refer here for more information.

There are two separate 1099s that you could receive:

Note: For California residents, you only need to earn at least $600 in ride payments to receive a 1099-K which differs from the typical form rules stated above.

If you do not qualify for the 1099-NEC or 1099-K, you should still be able to get an annual tax summary from the ride-share company. This summary usually covers your earnings for the year, so you can still use this summary to help you file.

The annual summary or 1099 you receive will provide you with certain information such as tolls or booking fees which can be listed as business deductions.

Even if for some reason you do not receive a 1099, the IRS expects you to report all of your income. Keep in mind that tips are also considered taxable income.

As a ride-share driver, your NAICS business code could be 485310, which is for Taxi and Ridesharing Services.

If this doesn’t fit your business services, or to see other options, you can find your NAICS code here.

The tax summary from the rideshare company should typically break down the total miles you drove either waiting for a trip, en-route to a rider, and on a trip.

However, you can also usually claim any other business-related mileage such as the mileage you drove to pick up riders, mileage you drove after dropping off riders, and mileage you drove before a ride was canceled. It is important to keep records of this mileage though.

In order to calculate the business use of the vehicle you can either deduct the actual expenses of operating the vehicle or use the standard IRS mileage deduction rate which is $0.655 for 2023.

Actual expenses can include gas, oil, insurance, car registration, repairs, maintenance, and depreciation or lease payments.

The standard mileage deduction is often the easiest option where you multiply the total business miles by the IRS rate.

It is important to hold onto any related receipts, documentation, or additional information such as mileage logs as the IRS could disallow any deductions that cannot be supported.

A smartphone can be deducted, but only the expenses related to your business use. If you choose to use your personal phone, it is recommended that you get an itemized phone bill so you can accurately measure your personal versus business use.

Deductions related to a phone can include the cost of the phone, billing charges, and any related accessories such as chargers and cradles.

The IRS's most basic guideline is that to be deductible, the business expense must be ordinary and necessary.

Common deductions for rideshare drivers are listed below, but are not limited to the following:

Guide To Taxes When Self Employed

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