What expenses can I deduct as a gig worker, according to the IRS?

Knowing which expenses you can deduct will help you save money during tax season.

When filing for taxes, you can choose the Standard Mileage deduction or the Actual Expenses deduction. The Standard Mileage deduction allows you to estimate your expenses based on a rate per mile. This rate has been set to 58 cents per mile for 2019 by the IRS. If you choose the Actual Expenses deduction, your estimation will be more precise and you might include expenses that wouldn't be reflected in the Standard Mileage deduction.
Expense
How do deduct?

Business insurance

100% of the business insurance premium can be deducted.

Business licenses

100% of fees to maintain your business can be deducted.

Business loan interest

100% of the business loan interest are deductible.

Gas and fuel

Deduct expenses based on business mileage.

If 50% of your miles are business-related, deduct 50% of the expense.

Deductible only if using the Actual Expenses deduction. Embedded in the Standard Mileage deduction.

Health Savings Account contribution (HSA)

If eligible, can deduct up to $3,500 for individual HDIP or $7,000 for family HDIP.

Health insurance premium

100% of health insurance premiums can be deducted.

Materials & Supplies

If the material and supplies are both ordinary and necessary for the business, then it can be deducted in full.

Memberships/subscriptions

Deductible if ordinary for the business.

Other tools and equipment

If the equipment is both ordinary and necessary for the business, then it can be deducted in full.

Parking and tolls

Same as vehicle insurance

Phone plan

Deduct expense based on the usage of the phone.

If phone is used 50% of the time for business, deduct 50% of the cell phone cost.

Phone (as an asset, usually if > $200)

Deduct expense based on the usage of the phone.

If phone is used 50% of the time for business, deduct 50% of the cell phone cost.

Repairs and maintenance

If the repair/maintenance is for pure business use, then deduct in full.

If the asset is also used for personal, then deduct only the applicable business portion

Vehicle insurance

Deduct expenses based on business mileage.

If 50% of your miles are business-related, deduct 50% of the expense.

Deductible only if using the Actual Expenses deduction. Embedded in the Standard Mileage deduction.

Vehicle lease

Same as vehicle insurance

Vehicle loan interest

Same as vehicle insurance

Vehicle registration

Same as vehicle insurance

Vehicle repairs

Same as vehicle insurance

Wash and road service

Same as vehicle insurance

An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business.


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