Did you know that if you are using your car to earn an income, you are eligible for several deductions on taxes? If you drive for a rideshare or a food delivery business, you will receive a 1099-K form from the company you drive for with information on what you earned. The earnings that you have made in the gig economy are to be filled out in Form 1040. Here are some of the top expenses to keep track of and avail as tax deductions in April.
Miles Are Tax Deductions
Make sure that you keep track of mileage for every single ride all year long. Make sure that you start tracking according to the delivery or rideshare app’s clock, as some start as you accept a trip, while others after you pick up.
License Costs
Suppose you have to renew your license to start or continue with services such as Uber, Lyft, or DoorDash make sure that you list that amount under deductions as well.
Phone Bills
This expense can stack up to be a lot in a year. Make sure you note the amount spent on your phone plan. Be careful only to make a note of the bills paid for the gigs only.
Car Accessories
Once you start doing food deliveries, you will begin to notice that you need a bunch of stuff. You will have to buy a phone mount so that it’s easier to follow directions on your GPS. You may also need to buy a portable compartment to keep all the food in. Anything that you buy for your car specifically to help you in gigs is tax-deductible.
Parking And Toll Fees
Sadly no one gets reimbursed for parking fees. It is easier to try and avoid parking fees than paying them and deduct them later. But the good news is that you get a tax deduction on them.
Maintenance And Cleaning
Every time you take your car in for repairs, tune-up, tire rotation, and oil changes, keep the receipts. You can also claim a tax deduction on cleaning, such as car wash and vacuuming your car’s interior.
AAA Memberships
If you have bought a membership with AAA for roadside assistance, safety, and reliability while working gigs, this can also be claimed as a tax deduction. This must be a business expense to qualify.
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