Top 8 Tax Deductions for Delivery Drivers

Tax deduction

Last Updated March 25, 2024

Delivery drivers, whether delivering food, packages, or other goods, play a crucial role in our economy. However, the expenses associated with this job can add up quickly. The good news is that delivery drivers can take advantage of various tax deductions to help offset these costs. According to IRS guidelines, this article will explore the top 8 tax deductions for delivery drivers.

Can Delivery Drivers Take Tax Deductions?

Yes, delivery drivers can take tax deductions for certain expenses related to their work. To qualify for these deductions, the expenses must be necessary for your job and not reimbursed by your employer.

Top 8 Tax Deductions for Food Delivery Drivers:

Mileage

  • Standard Mileage Rate: In 2022, the standard mileage rate is 58.5 cents per mile driven for business purposes. To calculate your mileage deduction, simply multiply the number of business miles driven by the standard mileage rate.
  • Actual Expenses: Alternatively, you can deduct the actual costs of using your vehicle for business, including gas, oil changes, repairs, and depreciation. To support your deduction, keep detailed records of these expenses, including receipts and mileage logs.

Parking

As a delivery driver, you may incur parking expenses while making deliveries. These expenses are generally deductible. Here are some examples:

  • Parking fees when making deliveries
  • Meter fees
  • Valet parking fees
  • Parking fines (e.g., for parking tickets received while making deliveries)
  • Tolls
  • Vehicle registration fees
  • Vehicle inspection fees
  • Vehicle repair and maintenance expenses

Phone Expenses

If you use your phone for work-related calls or to communicate with customers or your employer, you may be able to deduct a portion of your phone expenses. Keep records of your work-related calls to support your deduction. You can calculate the deductible portion based on the percentage of work-related calls versus personal calls.

Tolls

Tolls paid while driving for work purposes are deductible. Keep track of your toll expenses throughout the year. You can deduct tolls paid on bridges, tunnels, and highways, as long as they are related to your delivery work.

Roadside Assistance

If you subscribe to a roadside assistance service for your delivery vehicle, you may be able to deduct the cost of this service as a business expense. This includes services such as towing, jump-starts, and flat tire repairs. Keep records of your payments for roadside assistance to support your deduction.

Health Insurance

If you pay for your health insurance, you may be able to deduct your premiums as a self-employed individual. This deduction is taken on your personal income tax return. You can also deduct other medical expenses, such as prescription medications, doctor visits, and medical supplies, as long as they are not reimbursed by insurance.

Equipment and Supplies

You can deduct the cost of any equipment or supplies you purchase for your delivery job, such as GPS devices, maps, bags, and containers. Keep receipts and records of these purchases to support your deduction. Additionally, you can deduct expenses for maintaining and repairing your equipment.

Home Office Deductions

If you use a portion of your home exclusively for business purposes (e.g., as a home office or storage space for your delivery supplies), you may be able to deduct related expenses, such as a portion of your rent or mortgage interest, utilities, and property taxes. To calculate your home office deduction, determine the percentage of your home used for business and apply that percentage to your total home expenses.

Common Delivery Driver Tax Deduction Pitfalls and Mistakes to Avoid:

  • Failing to keep detailed records of expenses: It’s crucial to keep accurate records of all your business expenses, including receipts, invoices, and mileage logs. Without proper documentation, you may not be able to substantiate your deductions in case of an audit.
  • Mixing personal and business expenses: It’s important to keep your personal and business expenses separate. Use separate bank accounts and credit cards for business expenses to avoid confusion and ensure you can easily track your deductible expenses.
  • Not claiming all eligible deductions: Some delivery drivers may not be aware of all the deductions they are eligible for. Make sure to research and take advantage of all the deductions available to you, including those listed in this article.
  • Not understanding the rules for deducting vehicle expenses: Vehicle expenses can be a significant deduction for delivery drivers. However, it’s essential to understand the rules for deducting these expenses, such as keeping detailed mileage logs and differentiating between personal and business use of your vehicle.

Maximize Your Tax Deductions for Delivery Drivers with My Count Solutions:

If you’re unsure about which deductions you qualify for or how to maximize your tax savings as a delivery driver, consider consulting with a tax professional or using tax software like My Count Solutions. They can help ensure you’re taking advantage of all available deductions and avoiding common pitfalls.