Gig driver tax glossary.
The tax terms every rideshare and delivery driver runs into, in plain English. Reviewed for the 2026 tax year.
Mileage & deductions
The core concepts behind the deduction that saves gig drivers the most money.
Standard mileage rate
The per-mile amount the IRS lets you deduct for business driving instead of adding up actual vehicle costs. For 2026 it is 72.5 cents per mile through June 30 and 76 cents from July 1, after a mid-year increase. Multiply your business miles by the rate in effect on the date you drove. The rate covers gas, maintenance, insurance and depreciation; business parking and tolls are deducted on top. The 2026 rate change explained →
Deadhead miles
Business miles driven while working but without an active passenger, order or load: repositioning between orders, returning from a far delivery, or driving between apps. The term comes from trucking. They are deductible, but platform mileage summaries usually leave some or all of them out, so your own log is what captures them. The deadhead miles guide →
Commuting miles
The drive from home to where you start working and from your last stop back home. The IRS generally treats these as personal, not business, miles. The main exception is when your home is your principal place of business. Schedule C asks you to report commuting miles separately from business miles.
Business miles vs personal miles
Business miles are those you drive for gig work while actively working. Personal miles include commuting and errands while logged off. Only business miles are deductible, and your business, commuting and personal miles together should equal the total your odometer added for the year.
Actual expense method
An alternative to the standard mileage rate where you deduct the business-use percentage of real vehicle costs: gas, repairs, insurance, registration and depreciation. It takes far more paperwork, and for most drivers of economical cars the standard rate gives a larger deduction. If you use it in the first year a car is used for business, you cannot switch that car to the standard rate later.
Contemporaneous log
A mileage record kept at or near the time you drove, showing the date, distance and business purpose of your driving. Rebuilding your mileage from memory months later does not qualify. The IRS expects a contemporaneous log to support the mileage deduction, which is why automatic tracking matters.
Business-use percentage
The share of your vehicle’s total annual miles driven for business. It is used in the actual expense method and is a quick check that a mileage claim is reasonable. Reporting 100 percent business use on a car you also drive personally is hard to believe, so track personal miles too.
Tax forms & filing
The forms and payments that turn your driving into a filed return.
Schedule C (Form 1040)
The IRS form sole proprietors use to report business income and expenses. Gig drivers file one Schedule C for all their driving, reporting platform earnings on line 1, mileage on line 9 and vehicle details in Part IV. The net profit flows to Form 1040 and to Schedule SE. The line-by-line walkthrough →
Self-employment tax (Schedule SE)
The 15.3 percent Social Security and Medicare tax that 1099 workers pay, covering both the employee and employer halves that a W-2 job would split. It applies to about 92.35 percent of net profit once net self-employment earnings reach $400, and half of it is deductible on your 1040. It is the bill that most surprises new drivers.
Qualified business income (QBI) deduction
A deduction that lets most self-employed people, including gig drivers, deduct up to 20 percent of their qualified business income for income tax purposes. It is claimed on Form 8995 and does not reduce self-employment tax.
Tips deduction (“no tax on tips”)
For tax years 2025 through 2028, workers in eligible tipped occupations, including rideshare drivers, can deduct up to $25,000 of qualified tips from income tax, phased out at higher incomes. For self-employed drivers it cannot exceed the net profit from the work. Tips are still reported as income and still count for self-employment tax.
Quarterly estimated taxes
Tax payments 1099 workers make four times a year because no employer withholds tax from their pay. You generally owe them if you expect to owe at least $1,000 in tax for the year. For tax year 2026 they are due April 15, June 15 and September 15, 2026, and January 15, 2027. Missing them can trigger an underpayment penalty. The plain-English guide →
Safe harbor rule
A rule that lets you avoid an underpayment penalty by paying, across your four installments, the smaller of 90 percent of the current year’s tax or 100 percent of last year’s total tax. If your prior-year adjusted gross income was over $150,000, the second figure rises to 110 percent. Paying last year’s total in four equal parts is the simplest way to stay covered.
Income & 1099s
How your platform pay is reported and what the IRS taxes.
1099-NEC
A tax form that reports nonemployee compensation, such as referral bonuses or contractor pay. For payments made in 2026, the reporting threshold rises to $2,000, up from $600. You owe tax on all your gig income whether or not a 1099 was issued.
1099-K
A tax form that reports payments processed through a platform or payment processor, such as passenger fares. For 2026, platforms generally issue one only when payments exceed $20,000 and 200 transactions, after a 2025 law restored that threshold. The income is taxable even if you do not receive a form.
Gross receipts
The total your platforms paid you before any deductions: fares, delivery pay, tips, bonuses and incentives. This figure goes on line 1 of Schedule C, summed across every platform you drove for. If a platform’s figure includes fees it kept, you deduct those fees separately.
Net earnings (net profit)
Your gross receipts minus your business deductions, with mileage usually the largest. This is the figure taxed for both income tax and self-employment tax, so lowering it through legitimate deductions is the point of tracking your miles and expenses.
Deduction vs reimbursement
A deduction lowers the income you are taxed on and is what 1099 gig drivers claim. A reimbursement is money an employer pays back to a W-2 employee for driving, which does not apply to independent contractors. Searching for gig “mileage reimbursement” is common, but the tool you want is the deduction. The full explanation →