Rideshare Taxes 101: Mileage Deduction & Quarterly Payments

The IRS standard mileage rate for 2026 started the year at 72.5 cents per mile, then increased mid-year to 76 cents per mile effective July 1, 2026, due to rising fuel costs. That means your deduction calculation for 2026 actually splits into two periods — miles driven January through June at 72.5¢, and miles driven July onward at 76¢. If you're not tracking which miles fell in which half of the year, you're likely leaving money on the table or miscalculating your deduction.

The catch that costs drivers the most: you can only deduct miles you can prove with a contemporaneous log — date, purpose, and distance for every trip. Reconstructing mileage from memory in April is a real audit risk, and the platform's own trip data usually only captures en-route-to-pickup and on-trip miles, meaning a driver who logs everything independently often ends up with a meaningfully larger, better-documented deduction.

Because no employer is paying half your payroll tax the way a traditional job would, you owe the full 15.3% self-employment tax yourself — covering both the employee and employer share of Social Security and Medicare. This is calculated on 92.35% of your net earnings (after the mileage deduction and other business expenses), not your gross pay, so a healthy mileage deduction directly reduces this tax too, not just your income tax.

Since nothing is withheld from your payouts, the IRS expects you to pay estimated taxes four times a year rather than waiting until April — skip this and you risk an underpayment penalty even if you pay everything owed by the filing deadline. The standard due dates are April 15, June 15, September 15, and January 15 of the following year.

A simple habit that works for most drivers: set aside a fixed percentage of each week's gross earnings — many drivers land somewhere around 15-25% depending on their overall tax bracket and deductions — into a separate savings account, so the quarterly payment is already sitting there rather than a scramble.

Uber and Lyft report your earnings to the IRS via 1099-K (payment transactions) and/or 1099-NEC (bonuses and referral payments) — but income-reporting thresholds for these forms have shifted more than once in recent years, so don't assume you're in the clear just because you didn't receive one. All rideshare income is taxable and must be reported on Schedule C regardless of whether a 1099 actually arrives in your inbox.

If your net self-employment income for the year was over $400, you'll also need Schedule SE to calculate your self-employment tax.

You generally choose between the standard mileage rate (above) or deducting actual vehicle expenses (gas, insurance, repairs, depreciation) — not both. The standard rate is simpler for most drivers, but there's a lock-in rule worth knowing: you must choose standard mileage in the first year a car goes into business use, and once you switch to actual-expense depreciation, you generally can't go back to standard mileage for that same vehicle. This is a decision worth getting right the first time rather than switching year to year.