Are Uber Rides Tax-Deductible in 2024?

Can you deduct Uber and Lyft expenses?

Yes, sometimes! In many cases, you can deduct Uber and Lyft expenses if you’re self-employed. 

Eligible tax write-offs for self-employed Uber users

“As long as the expense is ordinary and necessary to operate their business, Uber and Lyft expenses are tax-deductible for self-employed folks,”  says Melissa Pedigo, a CPA. Per Pedigo, the following types of rides are eligible to be written off as business expenses:

• Visiting a client or supplier office
• Transportation to and from business conferences and networking events 
• Picking up supplies, inventory, or equipment 

For example, if you’re an online seller who takes Uber to thrift stores in order to source inventory, you can write off your rides. If you’re a personal trainer who takes Lyft to your clients’ homes for sessions, you can write off those rides, too.

However, not every Uber or Lyft ride will be deductible, even if you’re a self-employed worker. If you’re taking a trip for personal reasons, it’s obviously not a write-off, but there are a few other nuances, too.

According to the IRS, the following rides do not count towards a business expense:

• Commutes to your office (including coworking spaces)
• Doctor visits and social gatherings 
• Rides to sight-see while on a business trip   

Why your commute is not a tax write-off

No, sadly, your commute is not considered tax-deductible. A commute, according to the IRS, takes you between your home and your primary workplace — and until you get to that primary workplace, you can’t start incurring business miles yet.

What about rides that are for both business and personal purposes? 

If you’re on a work-related trip, you can write off business-related rides, but not personal rides. This can get complicated quickly, so Pedigo advises keeping good records of your travel expenses to make sure your bases are covered. 

If you’re taking a ride that has a mixed business and personal purpose, it might be wise to allocate those costs based on the business-use percentage of the trip itself. For example, if you spend 70% of a trip at an industry conference and 30% of the trip sightseeing, you’d write off 70% of your Uber ride to the airport.

And if combination work/business trips are a regular occurrence for you, be consistent with how you split your costs instead of trying to get creative. “This makes it easier for your bookkeeping and to justify your deductions if the tax authorities ask questions,” Pedigo says.

‍Keeper can help you track your deductible Uber rides as well as your other business expenses, so you don’t leave money on the table come tax time. You can even file your taxes right on the app.

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Can you deduct expenses if you’re an Uber driver? 

Yes, you can deduct business expenses as a driver! Rideshare drivers are considered self-employed independent contractors — not employees of the company they drive for. 

As a driver, there are four periods of a rideshare. Each one is viewed differently. They are:

• Period 0: A driver is running errands in their car with the app turned off, e.g. using your car to buy cat food. 
• Period 1: A driver is waiting for rides after they’ve turned their app on, e.g. you’re in the car listening to a podcast while you wait for rides
• Period 2: A driver has accepted a request for a ride and is on their way to pick the rider up
• Period 3: A driver has picked up the rider and is driving them to their destination

Drivers only get paid for Period 3, the only time a passenger is in their car. However, periods 1-3 are all considered business hours. ‍

How do you write off business expenses as an Uber driver?‍

There are two methods you can use to write off car-related business expenses as an Uber driver: the actual expenses method or the standard mileage method. Learn more about those — including which option is right for you — in Keeper’s 1099 tax guide for Uber drivers.

If you’re renting a car to drive for a ride-hailing company, you can only deduct the vehicle's rental cost on your taxes. This is especially important to point out as more drivers are renting a Tesla to drive for Uber under its partnership with Hertz.

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Reasons to use a ride-hailing service for business purposes

Using a ride-hailing service for your business travel instead of a personal vehicle has benefits. Here are a few of them.

Less wear and tear on your vehicle

Riding in another car for work means less wear and tear on your car! Even time spent idling in traffic can take a toll on your vehicle — opting for a ride-hailing service can save you extra car maintenance.

Might save you time

Taking a rideshare is often quicker than driving yourself, especially when you take parking into account.

Can be cheaper than parking fees

A rideshare is also frequently cheaper than, for example, making parking arrangements at the airport for your personal vehicle. If you’re already out of town, taking a few Ubers can also be more affordable than paying for a rental car (and, again, parking).

Here’s a personal example, albeit a non-business one: I’m visiting another financial reporter for her birthday, and we decided to treat ourselves to Dallas Cowboys tickets. After purchasing, she said we’ll have to use Uber because it’s cheaper than parking there, even though she lives 30 minutes away. 

How to write off Uber rides on your taxes 

You can write off business-related Uber and Lyft rides on Schedule C. If this ride was local, you can record it on Line 9. If it was part of a business trip, you’ll record it on Line 24a.

Tips for filing rideshare expenses

Finally, here are a few tips to help your expenses, including your Uber rides, are properly accounted for when filing your taxes.

Keep track of your projects and report all your income

It’s easy to let a project slip through the cracks — especially when you have a large number of clients. But I learned from personal experience not to do that! I once forgot to file my 1099 income of $3,000 only to be hit with a $900 bill from the IRS anyway. Trust me, they’ll get their dollars one way or another. And besides, you can soften the blow of being taxed on all that income by deducting your business expenses.

To make sure I report all my income, I’ve recently started keeping track of my assignments in a spreadsheet, which also helps ensure that I’m actually sending invoices on time and collecting payment. This way, I always know how much income I’m working with. It’s also helped me realize exactly where my time goes. Time blindness is one of the ADHD symptoms I struggle with the most, so having all the info I need in front of me is extremely helpful. 

Keep your expenses organized

Make sure you’re keeping track of your business expenses in a safe and organized manner. If you’re old-school, you can do this manually — or you can use an expense tracker like Keeper. It’ll automatically scan your purchases for potential write-offs, so you can be sure not to miss anything.

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Don’t get too “creative” with your expenses

It may be tempting to try to justify lots of things as business expenses. You start with office supplies and the next thing you know,  your Uber rides are all loosey-goosey and you’re reporting a trip to the vet as a business expense because your dog is “basically your assistant.” Or you’re a motivational speaker and trying to deduct Botox. Don’t do this! There’s no reason to give the IRS smoke signals over a few bucks.

Don’t miss out on claiming your rideshare expenses when filing your taxes. It’s a great way to utilize your business expenses to the fullest extent, especially because you’re going to be paying them regardless. So try not to sleep on this write-off.