The Mileage Deduction Most Drivers Underclaim

At 70 cents per mile, 20,000 business miles equals $14,000 in deductions. Most rideshare and delivery drivers track only a fraction of that.

Mileage is very likely the single largest tax deduction available to rideshare drivers, delivery drivers, and anyone who drives regularly for client work. It's also the deduction most commonly underclaimed, not because drivers don't know it exists, but because they don't track it consistently enough to claim the full amount they've actually earned through their driving.

How the Standard Mileage Rate Works

Each year, the IRS sets a standard rate per business mile that's meant to cover the full cost of operating your vehicle: gas, maintenance, depreciation, insurance, registration, all of it bundled into one per-mile figure. For 2026, that rate is 70 cents per mile. Multiply your total business miles for the year by that rate, and the result is your deduction, applied directly against your business income on Schedule C.

This is separate from, and instead of, deducting your actual gas receipts or repair bills individually. You choose one method or the other for a given vehicle, and once you pick the standard mileage rate in the first year you use a vehicle for business, you generally need to stick with it for that vehicle going forward if you want to keep the option open (switching to actual expenses later carries specific restrictions, particularly around depreciation).

What Counts as a Business Mile

For rideshare and delivery drivers specifically, the miles you can count are broader than many drivers assume, and this is where a lot of underclaiming happens:

• Driving to pick up a passenger or order, once you're logged into the app and available for a ride or delivery
• The trip itself, from pickup to drop-off
• Driving to a more favorable area while online and waiting for your next ping, since you're still actively engaged in business activity
• Driving between multiple platforms if you switch apps throughout a shift while remaining available for work

What generally doesn't count: your regular commute from home to wherever you typically start your shift, and any miles driven while the app is off or you're running a personal errand unrelated to work.

For freelancers and consultants who aren't driving for a delivery app, business miles include driving to client meetings, job sites, the post office to ship products, the office supply store for business purchases, and similar work-related trips. Your regular commute to a fixed office, if you have one, still doesn't count as a business mile under IRS rules, the same as it wouldn't for a traditional employee.

Why Drivers Underclaim

The most common reason is simple: no log. Without a contemporaneous record of dates, miles, and purpose, you're left trying to reconstruct a year of driving from memory in April, and memory badly underestimates actual mileage, especially for all the smaller trips and idle driving time that don't stand out individually but add up substantially. A driver who logs consistently through an app often finds they've driven thousands more business miles than they would have guessed from memory alone.

The second most common reason is not knowing that "online and waiting" time counts. Drivers sometimes only track miles during an active pickup or delivery, missing all the driving done while positioning for the next order, which for many drivers represents a significant share of their total time and miles on the road.

The third reason, less common but costly when it happens, is simply forgetting the deduction exists at all, particularly among newer gig workers who haven't yet built the habit of thinking about taxes as an ongoing part of the work rather than a once-a-year event.

How to Track It Properly

Manual logging works but requires real discipline: date, starting and ending odometer reading or mileage for the trip, destination, and business purpose, recorded for every single trip. Most drivers find this tedious enough that they eventually stop, which defeats the purpose since gaps in a log weaken its value if you're ever asked to substantiate it.

Automatic mileage tracking apps solve this by using your phone's GPS to log trips in the background without requiring you to remember anything. Stride is free and built specifically for gig workers, automatically detecting drives and letting you classify them as business or personal after the fact. MileIQ is a paid option with a slightly more polished interface and more detailed reporting. Either produces IRS-compliant records with far less effort than manual logging, and the subscription cost of a paid app is itself a deductible business expense.

Mileage vs. Actual Expenses: Which Wins?

For most gig drivers, particularly those using a moderately fuel-efficient vehicle, the standard mileage rate produces a larger and simpler deduction than tracking actual expenses. Actual expense tracking can occasionally edge ahead for drivers with an expensive vehicle carrying high loan interest, or one requiring frequent, costly repairs, since those individual costs can add up to more than the flat per-mile rate would capture. If you're unsure which method fits your situation, running the numbers both ways for a sample month can clarify which approach makes sense before you commit to a method for the vehicle.

A Real Example

A delivery driver who logs 20,000 business miles in 2026 claims a deduction of $14,000 (20,000 × $0.70). At a combined effective tax rate of roughly 25 to 30% once self-employment tax is factored in, that deduction alone can reduce their tax bill by $3,500 to $4,200. A driver who only logs 12,000 miles because they weren't tracking consistently, missing the idle time between deliveries, leaves 8,000 miles and roughly $5,600 of deduction on the table, translating to $1,400 to $1,700 of real tax savings left unclaimed simply from inconsistent tracking.

What to Do If You Haven't Been Tracking

If you're partway through the year and realize you haven't logged any mileage, start now rather than waiting for a clean slate next January. For the months already passed, some drivers reconstruct a reasonable estimate using ride-share or delivery app trip histories, which typically record distances for each accepted job, combined with a documented, conservative estimate for idle and positioning miles. This isn't as strong as a contemporaneous log, but it's considerably better than guessing from memory at tax time, and starting an automatic tracking app today protects everything going forward.

Common Questions

Do I need to keep gas and maintenance receipts if I use the standard mileage rate? No, the standard mileage rate already bundles those costs into the per-mile figure, so you don't need to separately track fuel or repair receipts if you're using this method. You do still need parking fees and tolls receipts, since those are deducted separately on top of mileage.

What if I use my car for both a delivery app and personal errands in the same trip? Only the business portion counts. If you're running a personal errand and happen to accept a delivery along a route you were already driving, the honest approach is to log only the mileage attributable to the business portion of that trip, not the whole drive.

Can I deduct mileage if I lease my car instead of owning it? Yes, the standard mileage rate applies the same way regardless of whether you own or lease the vehicle. Leased vehicles have some additional rules if you ever switch to the actual expense method, but the standard mileage rate itself works identically either way.

Does the mileage rate change mid-year? Occasionally, though it's not the norm. In years when it does change, generally due to a sharp shift in gas prices, the IRS announces separate rates for the first and second half of the year. It's worth a quick check on IRS.gov if you're ever unsure which rate applies to a specific stretch of the year.

What records actually satisfy the IRS if I'm audited? At minimum: the date of each trip, the mileage driven, the destination or route, and the business purpose. An automatically generated log from an app like Stride or MileIQ satisfies this on its own. A log reconstructed from memory months later carries far less weight and is more likely to be challenged.

The Bottom Line

Mileage tracking is the highest-leverage habit a driver can build for tax season. It takes seconds a day with the right app running in the background and can be worth thousands of dollars by the end of the year in deductions that would otherwise simply go unclaimed. Pair it with our Tax Calculator to see how your mileage deduction affects your actual tax bill, and use our Freelancer Tax Checklist to keep every other deduction on track too.