Tax Filing for Gig Economy Workers

Whether you drive for Uber, deliver for DoorDash, or freelance on Fiverr, learn how to file correctly and maximize your deductions.

Gig economy workers, including rideshare drivers, food delivery couriers, freelance marketplace sellers, and task-based workers, are classified as independent contractors. This means you are responsible for tracking your own income, paying self-employment taxes, and filing quarterly estimated tax payments.

The good news for gig workers is that you can deduct all ordinary and necessary business expenses against your gig income. For drivers, the mileage deduction is often the single largest deduction, worth 70 cents per mile in 2025. Other deductions include phone and data plans, insulated bags, car washes, and platform fees.

Starting with the 2024 tax year, gig platforms are required to report payments on Form 1099-K when they exceed $5,000. This threshold is scheduled to drop to $2,500 for 2025. Even if you do not receive a 1099-K, all income must be reported. Keeping accurate records is the foundation of correct gig worker tax filing.

Key Deductions & Credits

Vehicle Mileage Deduction

$3,000 - $12,000

Deduct 70 cents per business mile driven in 2025 using the standard mileage rate. This covers gas, insurance, maintenance, and depreciation in one simple calculation.

Self-Employment Tax Deduction

$500 - $3,000

Deduct half of your self-employment tax (7.65% of net earnings) as an above-the-line deduction on Form 1040.

Phone & Data Plan

$300 - $1,200

Deduct the business-use percentage of your cell phone bill and any data plan used for gig work navigation, communication, and app usage.

Supplies & Equipment

$100 - $500

Insulated delivery bags, phone mounts, chargers, car cleaning supplies, and safety equipment are all deductible business expenses.

Platform & Service Fees

$200 - $1,000

Fees charged by gig platforms, payment processing fees, and costs for premium features or background checks are deductible business expenses.

Forms You May Need

Schedule C (Form 1040) — Profit or Loss from Business

Schedule SE (Form 1040) — Self-Employment Tax

Form 1099-K — Payment Card and Third Party Network Transactions

Form 1099-NEC — Nonemployee Compensation

Form 1040-ES — Estimated Tax for Individuals

Filing Tips

Track every business mile with an app like Everlance, Stride, or MileIQ. Manual tracking is unreliable and the IRS requires contemporaneous records.
Set aside 25-30% of each payment in a separate savings account for taxes. Gig income has no withholding.
File quarterly estimated tax payments to avoid underpayment penalties. Due dates are April 15, June 15, September 15, and January 15.
If you work for multiple gig platforms, report all income on a single Schedule C or separate Schedule Cs by business type.
Choose between the standard mileage rate and actual expense method in your first year. The standard rate is simpler and often more beneficial for gig drivers.
Save receipts for car washes, parking fees, tolls, and other small expenses that add up over thousands of gig trips.

Common Mistakes to Avoid

Not tracking business miles and missing the largest deduction available to gig drivers, worth thousands of dollars per year.
Including commuting miles from home to a first gig location, which are not deductible business miles.
Forgetting to pay quarterly estimated taxes and getting hit with a 4-8% underpayment penalty on top of the taxes owed.
Not reporting cash tips or income from platforms that did not issue a 1099, which is still legally required.
Deducting total vehicle expenses when only the business-use percentage is deductible, which triggers audit flags.

Recommended Software

TurboTax Self-Employed imports income from major gig platforms and has industry-specific deduction guidance for rideshare drivers and delivery workers.

Review TurboTax

FAQ

Do I have to pay taxes on gig income under $600?

Yes. All income must be reported regardless of amount. The $600 threshold only determines whether a platform must issue you a 1099-NEC. If your net self-employment income exceeds $400, you owe self-employment tax.

Can I deduct miles driving to my first pickup?

It depends on your home office setup. If you have a qualifying home office where you manage your gig business, all miles from home to your first gig and last gig back home are business miles. Without a home office, the first and last trips may be considered nondeductible commuting.

What is the 1099-K threshold for gig workers?

For 2025, platforms must report payments exceeding $2,500 on Form 1099-K. This applies to total gross payments before any fees or deductions. Even below this threshold, you must report all income on your tax return.

Can I deduct my car payment for gig work?

Not directly if you use the standard mileage rate, which already accounts for depreciation. If you use the actual expense method, you can deduct the business-use percentage of depreciation (not the car payment itself), plus gas, insurance, and maintenance.

Should I use the standard mileage rate or actual expense method?

For most gig workers, the standard mileage rate of 70 cents per mile is simpler and often produces a larger deduction. The actual expense method may be better if you drive an expensive vehicle with high maintenance costs. You must choose the standard rate in the first year the vehicle is used for business.