Gather statements from every platform
Each platform provides weekly or annual earnings summaries showing fares, tips, fees, promotions and sometimes tolls reimbursed. Download them regularly, since access may expire. Record gross income by platform, and the service fees as expenses. Your annual tax form from an app may not match what you actually earned, so use your own records.
Choose and document a vehicle method
There are two common methods: the standard mileage rate or actual vehicle expenses. The right one depends on the vehicle and your situation, and switching later may have limits. Whichever you pick, keep a mileage log with the date, purpose, start and end odometer or an app-based log. Business miles generally include time driving with the app on and trips to pick up passengers, but commuting is treated differently, so ask a tax professional.
Other deductible costs
Phone plans, phone mounts, dash cams, car washes, tolls and parking, insurance endorsements for rideshare, and bags for food delivery can be business expenses, depending on use. Separate personal and business use for items like phones. Keep receipts in one app or folder, and note the business purpose when it is not obvious.
Taxes and the savings habit
No tax is withheld from your payouts. Move a portion of each payout into a separate savings account right away, and make estimated payments as your tax professional recommends. Self-employment tax applies in addition to income tax. A slow week should not stop the savings habit, because the annual bill is calculated on the full year.
Open a dedicated checking account for gig income and use a card only for business costs. It makes the monthly report painless.
Monthly profit check
Divide net income by total miles and hours to learn what you actually earn per mile and per hour after costs. Compare apps, times of day and zones. Many drivers find that a lower-paying but shorter trip beats a longer one after fuel and wear. Plan for repairs and tires with a monthly set-aside, and review your insurance coverage with an agent to confirm the personal policy does not leave gaps while the app is on.
Insurance, repairs and the cost of a mile
Add up fuel, oil changes, tires, repairs, insurance, registration and depreciation, then divide by total miles driven for the year. That figure is what each mile truly costs you. Compare it to your average earnings per mile after platform fees. Drivers who do this exercise often drop the worst-paying trips and shift hours to the periods that pay the most.
Put a few dollars aside for every mile driven into a vehicle fund, so a large repair does not force you to borrow.
Worked example with numbers
A month's platform statements show $3,200 of gross earnings. The deposits total $2,780 after fees. Record $3,200 as income and $420 as platform fees. Mileage log shows 1,850 business miles. Track other costs like phone share and tolls. Set aside a share of each payout for estimated taxes as your preparer advises.
Mistakes that cost money
Counting deposits as income. No mileage log. Missing tips. Ignoring estimated taxes.
Check your work
Compare platform year-end summaries to your monthly totals.
Common questions
Do I need to track mileage if I use actual expenses?
Yes. You still need the business percentage, which comes from a mileage log.
Are tips income?
Yes. Tips are reportable income whether they come through the app or in cash.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.