What Can I Write Off as a Delivery Driver?

As a delivery driver, understanding tax write-offs is important for managing your finances. Tax write-offs, also known as deductions, are specific expenses you incur while performing your job that can reduce your taxable income. For self-employed individuals like delivery drivers, these deductions lower the amount of earnings subject to tax, decreasing your tax liability.

The foundational principle for what can be deducted is that an expense must be both “ordinary and necessary” for your business. An ordinary expense is common and accepted in your industry, while a necessary expense is helpful and appropriate for your trade or business. It is important to note that a necessary expense does not have to be indispensable to be considered deductible. These deductions are typically reported on Schedule C (Form 1040) when you file your tax return.

Vehicle Expenses

Vehicle expenses are a significant deduction for delivery drivers. You have two primary methods for deducting these costs: the standard mileage rate or the actual expenses method.

The standard mileage rate offers a simpler approach, allowing you to deduct a set amount for each business mile driven. This rate is determined annually by the IRS and is designed to cover various vehicle-related costs such as gas, oil, maintenance, insurance, and depreciation. For 2025, the business standard mileage rate is 70 cents per mile. While this method simplifies record-keeping by only requiring mileage tracking, it may not fully account for all expenses, especially if your vehicle incurs high repair costs.

Alternatively, the actual expenses method allows you to deduct the specific costs of operating your vehicle for business purposes. This includes expenses like gasoline, oil changes, repairs, tires, insurance premiums, registration fees, and lease payments or depreciation. If you choose this method, you can only deduct the business-use percentage of these total costs. For instance, if you use your car 70% for business, you can deduct 70% of your actual vehicle expenses.

The standard mileage rate is often beneficial for high-mileage drivers due to its simplicity, while actual expenses might yield a larger deduction if you have a high-cost vehicle or significant repair expenses. If you use the actual expense method for a vehicle in its first year of business use and claim depreciation, you generally cannot switch to the standard mileage rate for that vehicle in subsequent years. However, if you start with the standard mileage rate for an owned vehicle, you can typically switch to actual expenses in later years.

Communication and Technology Costs

Delivery drivers rely on technology for their work, making related expenses a common deduction. Your cell phone and data plan are often used for accepting orders, navigating routes, and communicating with customers or the delivery platform. You can deduct a portion of your personal cell phone bill based on its business-use percentage. If you have a separate phone used solely for business, you can deduct 100% of its cost and associated plan.

Certain app subscriptions are also deductible if they are necessary for your delivery operations. This could include paid apps for mileage tracking, route optimization, or specific delivery platforms. Accessories primarily used for your delivery work, such as phone mounts, car chargers, or portable power banks, can also be deducted. Always ensure you can demonstrate the business purpose for these technology-related costs.

Other Business Supplies and Fees

Insulated bags or courier backpacks, essential for keeping food warm and secure, are fully deductible. If your delivery work requires specific uniforms or protective gear, such as branded shirts or sturdy shoes, their cost can also be deducted.

Tolls and parking fees directly incurred while on delivery routes are deductible, even if you use the standard mileage rate for your vehicle. Membership fees for roadside assistance programs, like AAA, can also be deducted, but only the portion attributable to business use. Business licenses or permits required to operate as an independent contractor or delivery driver are also deductible. Fees paid for tax preparation services for the business portion of your tax return are generally deductible.

Record Keeping Essentials

Maintaining accurate records is important for substantiating your tax deductions. The IRS requires you to keep adequate records to prove your expenses in case of an audit. Good record-keeping not only helps you maximize your deductions but also saves time and potential issues during tax season.

For each expense, record the date, amount, vendor, and specific business purpose. Tracking your mileage is especially important. For each business trip, log the date, starting and ending odometer readings, the destination, and the business purpose. This detailed record helps determine your business-use percentage for vehicle expenses.

You can use mileage tracking apps, which automatically log trips, or use spreadsheets to manually track income and expenses. Dedicated accounting software can also streamline the process. Always keep physical receipts or digital copies for all business expenditures.

Separating your business and personal finances, perhaps through a separate bank account, can significantly simplify expense tracking. The IRS generally recommends keeping records for at least three years from the date you file your original tax return.