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Are you a delivery driver looking to save money on your taxes?
You’re in luck!
There are many tax write-offs that can help you keep more of your hard-earned cash.
From mileage to supplies, knowing what you can deduct can make a big difference.
In this article, we’ll guide you through the essential tax write-offs every driver should know about.
So get ready to maximize your savings and make tax season a breeze!
10 Tax Deductions Delivery Drivers Can’t Miss
Vehicle Expenses
Since you use your vehicle as part of your job, you get to write off common expenses like gas fill-ups.
But it doesn’t stop there.
Regular maintenance counts too.
This includes oil changes, new tires, a new battery, and more.
If you use your vehicle 100% for business, then you can write off every last penny you spend on it.
But if your car is mixed use, meaning you use it for personal and business needs, then you need to track your miles as you can only write off the portion related to your business.
Mileage Reimbursement
Another great write off you can take advantage of is the miles you drive.
The IRS allows you to deduct a set amount per mile driven for business purposes, which can add up to significant savings.
To take advantage of this deduction, keep a detailed log of your business miles, including the date, purpose, and number of miles driven for each trip.
Using a mileage tracking app can make this process easier so you have accurate records come tax time.
The best app out there is MileIQ.
It offers automatic mileage tracking, which saves you a few hours every month — and thousands of dollars every year.
Each year the average driver deducts over $8400!
Vehicle Depreciation and Loan Interest
Do you need a new car?
You can depreciate the cost of the vehicle as well, saving you money on taxes.
Depreciation accounts for the decrease in your car’s value over time due to wear and tear from business use.
And if you have an auto loan, you can write off the interest you pay.
As long as the vehicle is used for business purposes, the interest you pay on the loan is a tax-deductible business expense.
And as I mentioned earlier, if your vehicle is mixed use, meaning personal and business, it is critical you keep detailed records so you can account for the right amounts you can legally write off.
Tolls and Parking Fees
Depending on your route, there are other fees you might be paying as part of your business.
For example, if you operate in a city, there may be parking fees you have to pay.
If you work in a more rural area, you might have to drive on toll roads.
The good news is both of these are expenses you can write off.
Keep the receipts or statements you get so you can be sure of the amount you can write off come tax time.
Vehicle Inspections and Licenses
Annual registration fees, inspections, and any licenses you need as part of your job can be written off on your taxes.
In most cases, these won’t add up to a large amount, but you can still deduct them from your income – and you should – as doing so is perfectly legal.
Even if it means you reduce your taxes $20 – $100, over time, that amount can add up.
Auto Insurance
A big expense every car owner has to pay is car insurance.
As a delivery driver, your auto insurance is a business expense you can write off.
If you also operate as a rideshare driver and need additional rideshare-specific coverage, you can deduct this from your taxes as well.
One important thing to remember as insurances rates increase is to not ignore the power of shopping around for a lower premium.
As nice as it is to write off this expense, you have to remember it is still an expense that lowers your income.
The lower your premium, the more money you keep.
Cell Phone
Do you use your cell phone as part of your business?
As a delivery driver, your phone is essential for navigating routes, communicating with customers, and managing orders.
Because of this, you can write off a portion of your cell phone bill as a business expense, specifically the part used for these work-related activities.
To take advantage of this deduction, keep detailed records of your phone usage and monthly bills.
By determining the business-related portion of your cell phone expenses, you can lower your taxable income and keep more of your hard-earned money.
Health Insurance
As a self-employed person, you can write off the health insurance premiums you pay.
The catch here is you have to get coverage, it cannot be offered by your employer.
For example, if you work a full-time job and get health insurance as a benefit, you cannot write it off as a business expense if you offer rideshare services on the side.
However, if you don’t get health insurance from your employer, and you buy it on your own, then you can deduct 100% of the premiums you pay.
Home Office Deduction
While you spend the majority of your time on the road, you still could have a home office where you do your paperwork.
This includes things like managing your schedule, handling paperwork, or maintaining records.
If this is the case, it makes sense to look into deducting a portion of your home as a business expense.
The IRS allows you two options, the simple option, which is a flat deduction, or the regular method, where you take the square footage of your office relative to your home and deduct a percentage.
In most cases, taking the time to measure your office will yield more savings.
Business Related Supplies and Equipment
As you might have guessed, if you have a home office, you can deduct the supplies you need for your office.
This includes paper, pens, notebooks, computers, printers, and even furniture.
If you remodel your office, you can deduct the cost of any improvements you make as well.
Final Thoughts
There are many tax benefits that come with being a business owner, and this extends to delivery drivers.
While one or two of these deductions might not seem like a sizable amount of money, when you account for all of them, you can write a serious about of money.
This keeps a nice amount away from Uncle Sam and in your pocket.
I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.
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