Can Pizza Delivery Drivers Write Off Mileage on Their Taxes?

Pizza delivery drivers often have questions about tax deductions, particularly regarding mileage. Understanding deductible expenses is crucial for maximizing savings and staying compliant with tax regulations. This issue directly affects the financial well-being of gig economy workers. Here’s how pizza delivery drivers can effectively navigate this aspect of their taxes.

Which Trips Qualify

For pizza delivery drivers, deductible trips are defined by IRS rules. Business-related travel—such as trips made during deliveries—is deductible. However, commuting from home to the workplace is considered personal and not eligible. Once a driver begins their delivery route, mileage from the restaurant to the customer’s location and back qualifies as business-related.

It’s important to separate personal and business travel. Detours for personal errands during a delivery route are not deductible. For instance, stopping at a grocery store during a delivery route makes the mileage between the restaurant and the store personal. Drivers need to track their routes carefully to ensure only business-related mileage is claimed.

Standard Mileage Rate

The standard mileage rate simplifies travel expense deductions. In 2024, the IRS set this rate at 59 cents per mile for business use, covering fuel, maintenance, depreciation, and insurance.

This method is straightforward—drivers multiply their total business miles by the standard rate. For example, 5,000 business miles would result in a $2,950 deduction (5,000 x $0.59). It’s a practical option for those who find it difficult to track or calculate actual expenses.

Actual Expense Approach

The actual expense approach allows drivers to deduct specific vehicle costs like fuel, oil changes, repairs, registration fees, and depreciation. This approach can be beneficial for those with vehicle expenses that exceed the standard mileage rate.

Accurate record-keeping is critical. Drivers must keep receipts and invoices for all vehicle-related expenses, as the IRS requires documentation to support deductions. Only the business-use portion of expenses is deductible. For example, if a car is used 70% for business, only 70% of the expenses can be claimed.

Depreciation is another key component. Drivers often use the Modified Accelerated Cost Recovery System (MACRS) to recover vehicle costs over time. Understanding these rules can help maximize deductions.

Keeping Proper Records

Accurate records are essential for managing tax deductions. The IRS requires evidence to substantiate deductions, so drivers should maintain a detailed mileage log, noting dates, destinations, and trip purposes. A well-kept log ensures compliance and serves as proof during an audit.

Drivers using the actual expense method should also keep receipts for fuel, maintenance, and repairs. Digital tools like apps for tracking mileage and categorizing expenses can simplify the process and reduce errors. Storing digital copies of receipts safeguards against loss or damage, ensuring records are readily available when needed.

Employer Reimbursement

Employer reimbursement policies affect deductible mileage. If an employer reimburses at or above the IRS standard mileage rate, drivers cannot claim additional deductions, as the reimbursement covers those costs.

If reimbursement falls below the IRS rate, drivers can deduct the difference. For example, if reimbursed 40 cents per mile while the IRS rate is 59 cents, the 19-cent difference per mile is deductible. However, under the Tax Cuts and Jobs Act (TCJA), unreimbursed employee expenses are not deductible for W-2 employees through 2025, limiting this option to independent contractors or self-employed drivers.

Drivers should review pay stubs or reimbursement statements to understand how employers categorize these payments. If reimbursements are included as taxable income, further deductions may be allowed. Non-taxable reimbursements typically mean the employer has accounted for the mileage expense. Understanding reimbursement policies helps drivers avoid over-claiming or missing potential deductions.