[Event] Ask the Experts: Tax Breaks For Your Side Gig

You're absolutely right – the idea of meticulously logging every single stop for a rideshare or delivery driver sounds incredibly time-consuming and almost impossible to maintain consistently. Record-keeping is crucial for anyone claiming a mileage deduction. The IRS urges you to maintain “comprehensive and contemporaneous records” in case they are requested. Contemporaneous record-keeping is particularly important to the IRS. This means recording your trips as they happen, not reconstructing them later. The IRS is more likely to challenge reconstructed records during an audit.

While the IRS does require adequate records to substantiate your mileage deduction, "every stop" doesn't necessarily mean a separate line item for each individual delivery or passenger drop-off if you're continuously driving for business.

Your mileage log should include:

• Date of the trip: When the trip occurred.
• Purpose of the trip: Why you were driving (e.g., "Rideshare driving," "Food delivery for DoorDash," "Picking up supplies for Uber Eats").
• Destination(s): The general location of the business activity.
• Total miles driven: The actual distance driven.

Using a mileage tracking app is highly recommended for accuracy and ease. Recording the total mileage for the day can be acceptable if you ensure that your log includes the necessary details for each trip. Using a digital mileage tracker can help you capture all required information without needing to manually log every stop.

What is NOT Acceptable:

• Estimating: Simply guessing your mileage at the end of the month or year.
• Rounding: Don't round up or down significantly.
• "Just recording the mileage for the day" without other details: While you do need the daily mileage, the IRS also wants to know the purpose and general locations to confirm it was business-related. A single number without context is weak for an audit.
• Reconstructing records months later: The IRS prefers "contemporaneous records," meaning records kept at or near the time of the expense. Weekly updates are generally considered acceptable, but daily is best.

@AdamD1 Thanks for the question!! Hope this answers your question!