1099 vs W2 in plain English
W2 employees have taxes withheld from each paycheck. 1099 contractors are responsible for their own taxes, including self-employment tax (Social Security + Medicare). The trade-off is access to deductions W2 workers cannot claim.
Top deductions every gig driver should track
These are the deductions that actually move the needle.
- Mileage: IRS standard rate for business miles (track every drive)
- Vehicle expenses (alternative to mileage): gas, oil, repairs, insurance, depreciation
- Phone bill: business-use percentage
- Tolls and parking
- Hot bags, car cleaning, supplies
- Health insurance premiums (if self-employed)
- Home office (for freelancers with a dedicated workspace)
Quarterly estimated taxes
If you owe more than $1,000 at year end, the IRS expects quarterly payments in April, June, September, and January. Skip them and you owe penalties. A good rule of thumb: set aside 25–30% of every payout in a separate account.
Software that pays for itself
Stride (free), Everlance, and MileIQ are the most-used mileage trackers. Even a $5/month tracker pays for itself in week one once you see the deduction it captures.
Frequently asked questions
Do I really have to pay quarterly taxes?
If you expect to owe more than $1,000 in federal tax for the year, yes. Skipping leads to underpayment penalties.
Can I deduct miles I drive between orders?
Yes. All miles driven while logged into a gig app for work purposes are deductible, including between deliveries.
What is the 2026 mileage rate?
Check the IRS announcement for the current year's rate. It updates annually. Use the most recent published figure when filing.
Related reading
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