Any Uber/Lyft/Grubhub/DoorDash etc drivers here?
(sigh) the gig economy sucks so bad.
You're probably doing your taxes wrong, and you have my commiserations.
Ok, first off. You should be keeping track of your beginning and ending mileage for the year, on each vehicle you use.
Didn't do that last year? You're not alone. Add 14,000 to your total business miles (we'll get to that one in a minute) and call it good. If the IRS questions your return, that number is slightly higher than most estimates of the national average, and you'll at least have a rationale to give them; but be prepared for some grief if it's a full audit. If you didn't own the vehicle all year, pro-rate that number.
Next: Commuting miles. If you have a job in addition to your 'business', figure those out. If, like most people, you haven't been keeping a very good mileage log, you can estimate based on the number of days you worked and the distance to/from work.
However... If there are days that you only did the "gig" (or if the gig was your only work), you need to be aware that the distance from your home to your first business-related stop is a commute, as well as the distance from your last business stop to your home. (The corner gas station doesn't count, nice try.) Nobody else gets paid for their commute and you can't count it in business miles. If you just want to throw in an estimate and be done with it, I would go with 7,000... but again, if the IRS questions your return, and it's a full audit, you'll have some serious work to do trying to reconstruct your commuting miles based on something they'll accept. If you didn't own the vehicle all year, pro-rate the above number. So that's 7,000 commuting miles and 7,000 personal miles making up the 14,000 miles you add to business miles to get total miles.
Despite all this, there are probably business miles you AREN'T counting that you should. Uber and Lyft give you a breakdown at the end of the year which includes "online miles." This number does NOT include miles between a drop-off and the next pick-up; you should be using a mileage app or some other method to keep track of those miles.
Most people use the standard mileage rate. If you start with actual vehicle expenses in the first year you put the vehicle into service, you can't switch to SMR in later years. You can switch from SMR to actual expenses in later years, but you'll need to do some depreciation calculations.
Final note on vehicle expenses: The standard mileage rate doesn't take into account parking/tolls/fees (you can't add parking tickets or traffic tickets, again nice try); personal property tax on your vehicle; or car loan interest. You can add these in. You also probably spend extra on car washes/detailing; add this in. The reason for knowing ALL your mileage is that you only get to deduct the business percentage of personal property tax and the car loan. (Parking fees at your normal job are a non-deductible commute expense.)
Cell phone: You can and should be deducting this expense. Estimate what percentage is used for business (hours of work divided by total hours used) for phone charges and related equipment.
Here's a nice article (also an advertisement for a company I am not associated with and know nothing about) that covers a few other things:
https://blog.stridehealth.com/post/9-tax-deductions-you-have-to-be-taking-as-a-rideshare-driver
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