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 for the date you drove to get your deduction. See the 2026 rate change explained.
Deadhead miles
Business miles driven without an active passenger or order: repositioning between fares, returning from a far delivery, or driving to a busy zone while working. They are deductible, but platforms usually do not report them, and they add roughly 15 to 30 percent more deductible mileage. See the deadhead miles guide.
Business miles vs personal miles
Business miles are those you drive for gig work while actively working. Personal miles include your commute to your first zone, the drive home after your last stop, and errands while logged off. Only business miles are deductible, and your business plus personal miles together cannot exceed 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 your real vehicle costs: gas, repairs, insurance, and depreciation. It usually involves far more paperwork, and for most drivers the standard rate produces a larger deduction. If you use it in the first year a vehicle is in service, you generally cannot switch to the standard rate later for that vehicle.
Contemporaneous log
A mileage record kept at or near the time you drove, including the date, distance, and business purpose of each trip. Reconstructing your mileage from memory months later does not qualify. The IRS requires a contemporaneous log to substantiate the mileage deduction, which is why an automatic tracker matters.
Business-use percentage
The share of your vehicle's total annual miles that were driven for business. It is used in the actual expense method and to check that a mileage claim is reasonable. A full-time gig driver is usually somewhere between 70 and 90 percent business use, because almost no driver has zero personal miles.
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 and deducting mileage and other costs. The net profit flows to your Form 1040 and to Schedule SE. See the line-by-line walkthrough.
Self-employment tax (Schedule SE)
The 15.3 percent Social Security and Medicare tax that 1099 workers pay on their net earnings, covering both the employee and employer halves that a W-2 job would split. It applies to about 92.35 percent of your net profit, and half of it is deductible on your 1040. This is the bill that most surprises new drivers.
Quarterly estimated taxes
Tax payments that 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. Missing them can trigger an underpayment penalty. See the plain-English guide.
Safe harbor rule
A rule that lets you avoid an underpayment penalty by paying, across your four installments, either 90 percent of the current year's tax or 100 percent of last year's total tax, whichever is smaller. If your prior-year AGI 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 of $600 or more, such as referral bonuses or other contractor pay from a platform. Receiving one does not change the fact that 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 your passenger fares. The reporting threshold dropped to $5,000 for 2026, down from much higher figures in prior years, and it has been subject to ongoing legislative change. As with any 1099, the income is taxable even below the threshold.
Gross receipts
The total amount your platforms paid you before any deductions: fares, delivery fees, tips, bonuses, and incentives. This figure goes on Line 1 of Schedule C. If you drove for several platforms, you sum them into a single gross-receipts figure.
Net earnings (net profit)
Your gross receipts minus your business deductions, with mileage usually the largest. This is the figure that actually gets taxed, both for income tax and for self-employment tax, so lowering it through legitimate deductions is the whole 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 actually want is the deduction. See the full explanation.