How Gig Worker Taxes Work
If you drive for Uber/Lyft, deliver for DoorDash/Instacart, or sell on Etsy/Amazon, you're self-employed. You'll receive a 1099-K from each platform reporting gross transactions (if $600+) and possibly a 1099-NEC for bonuses or incentive payments.
Warning
The 1099-K reports gross transactions, not profit. A driver who collected $40,000 through DoorDash but spent $15,000 on gas and car expenses has $25,000 in net profit. Always deduct your expenses on Schedule C.
Key Deductible Expenses
Mileage (Biggest Deduction for Drivers)
Driving is usually the largest expense for rideshare and delivery workers.
| Method | 2025 Rate | What's included |
|---|---|---|
| Standard mileage | $0.70 per mile | Gas, insurance, depreciation, maintenance |
| Actual expenses | Track everything | Gas, oil, tires, insurance, registration, depreciation |
Track every business mile. Use an app to log trips automatically. Miles from home to first pickup, between pickups, and from last dropoff back home all count.
Platform Fees and Commissions
The 1099-K reports gross amounts — it includes the platform's cut. Deduct platform fees, service charges, and commission percentages on Schedule C. These are real expenses that reduce your net income.
Phone and Data Plan
If you use your phone for the gig platform app, navigation, and communication, deduct the business percentage. If 70% of your phone use is for gig work, deduct 70% of your monthly bill.
Supplies and Equipment
- Insulated delivery bags
- Phone mounts, chargers, and car accessories
- Packaging materials (Etsy sellers)
- Shipping costs (Etsy/Amazon sellers)
Other Deductible Expenses
- Parking and tolls (while working)
- Car washes (if required by platform)
- Safety equipment (masks, sanitizer)
- Insurance (rideshare gap insurance)
- Etsy/Amazon seller fees, listing fees, advertising
What's NOT Deductible
- Traffic tickets and parking violations
- Commuting from home to a regular job (only gig miles count)
- Personal meals while working (food you eat yourself)
- Clothing (unless it's a required uniform)