Vehicle & Mileage Deductions
The standard mileage rate allows you to deduct $0.70 per business mile driven in 2026. This single deduction covers all vehicle costs — gas, oil, maintenance, depreciation, and insurance — in one simple per-mile rate. For most gig workers, this is their largest deduction by far.
Parking fees and road tolls paid while on active gig work trips are deductible — even if you're using the standard mileage rate. This is one of the few additional vehicle expenses you can claim on top of the per-mile deduction.
Phone & Data Plan
Your smartphone is a required tool for gig work — you can't accept or complete orders without it. The business-use percentage of your monthly phone and data plan is deductible. Most active gig workers use 70–90% of their phone for work purposes.
Self-Employed Health Insurance Deduction
Self-employed individuals can deduct 100% of health insurance premiums paid for themselves, their spouse, and dependents. This is an "above-the-line" deduction — it reduces your adjusted gross income, which can also affect your subsidy eligibility and other deductions.
Half of Self-Employment Tax
The IRS allows self-employed workers to deduct 50% of their self-employment tax from gross income before calculating income tax. This deduction exists because W-2 employees receive the employer's half of FICA as an invisible benefit — self-employed workers get a comparable adjustment this way.
Business Equipment & Supplies
Any equipment or supplies you purchase primarily for your gig work is deductible. For delivery drivers this includes insulated hot bags, car phone mounts, car chargers, coolers, and cleaning supplies. For rideshare drivers: dash cams, seat covers, air fresheners, and phone holders all qualify.
Any software subscription you use to manage your gig business is deductible. Mileage tracking apps (Everlance, MileIQ), accounting software (QuickBooks, Wave), and scheduling tools all qualify.
Home Office Deduction
If you have a dedicated area of your home used exclusively and regularly for gig work — dispatching orders, managing your business, tracking finances — you may qualify for the home office deduction. The simplified method ($5/sq ft, max 300 sq ft) is easiest for most gig workers.
Retirement Contributions
Self-employed workers can contribute up to 25% of net earnings to a SEP-IRA (maximum $69,000 in 2026). Every dollar contributed reduces your taxable income dollar-for-dollar — this is the single most powerful tax reduction tool available to high-earning gig workers, yet most never use it.
More Deductions Gig Workers Often Miss
Courses, books, or training that helps you do your existing gig work better are deductible. This includes courses on tax strategy for self-employed workers, driving optimization apps, or business management skills. Note: education for a new career or job doesn't qualify.
Monthly fees for business banking accounts (Lili Pro, Found Plus, Relay, etc.) used for your gig work are deductible business expenses. Any fees charged by payment processors or gig platforms on transactions may also be deductible.
The portion of your tax preparation fees attributable to your gig income (Schedule C) is deductible. If you hire a CPA to file your return, the fee allocated to your self-employment schedule is a deductible business expense.
Frequently Asked Questions
The IRS generally requires receipts for expenses over $75. For smaller amounts, a contemporaneous log or bank/credit card statement is often sufficient. For mileage, you need a mileage log — not receipts. For subscriptions, the billing statement or email confirmation is fine. Keep records for at least 3 years from the filing date (7 years if you have income significantly under-reported).
Startup costs incurred before your business opened are deductible up to $5,000 in the first year (with the remainder amortized over 15 years). For gig workers, this is rarely a significant amount, but if you purchased equipment or took courses before your first order, those costs may qualify as startup expenses.
A deduction reduces your taxable income, so its value depends on your tax rate. A $1,000 deduction saves you $250 at a 25% rate. A tax credit reduces your tax bill directly, dollar-for-dollar — a $1,000 credit saves exactly $1,000. Credits are more valuable but less common for self-employment income. Most of what gig workers benefit from are deductions, not credits.
Generally no — the IRS is strict about meal deductions for self-employed workers. You can deduct 50% of meals that are directly business-related (like a lunch with a client), but meals you eat personally while working your shift do not qualify. The "business meal" rules are designed for more formal business contexts and rarely apply to gig work.