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Niaship
Returning Member

I Ride-share and deliver

I just started ride sharing and delivering for about a month now. Since I'm brand new to this business, Im just trying to do everything correctly. I just found out about the mileage and expenses tracking part. Will I be penalized for the weeks that I didn't have a mileage and expenses report? Or well I'll be allowed a grace period that will give me time to set up the applications is needed to provide  mileage and expenses reports?

2 Replies
Bsch4477
Level 15

I Ride-share and deliver

Congratulations on committing to conduct your activity in a business like manner. You can create a mileage log retrospectively using any reasonable documentation or method. 

Opus 17
Level 15

I Ride-share and deliver

It is the taxpayer's responsibility to prove any deduction.  Most taxpayers are never audited.  If you are unlucky enough to get audited, and you can't document your mileage deduction, the examiner can recalculate your expenses and tax owed based on whatever you can prove, and send you a bill for the extra tax.  

 

Even so, I expect your delivery apps at least track the mileage you drove for each delivery.  That will be a start, although they might not track miles driven while not officially on a job, even though those miles are usually deductible as well.  

 

The rules for deducting vehicle expenses are in chapter 4 of publication 463.

https://www.irs.gov/pub/irs-pdf/p463.pdf

 

The standard mileage method is better for most drivers, and is less paperwork.  You can't track your first trip of the day from home to your first work location, or your last trip home at the end of the day, since that is considered "commuting" and is not deductible.  But other mileage is deductible even if you are not on the clock.  For example, if you give someone a ride home from a bar late at night, and you drive back to the part of town where all the clubs are to be ready for another pick-up, that mileage would be deductible even though you don't have a client in the car.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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