What can you expense as a freelancer? The “Drivers” edition
Have you ever found yourself surrounded by fellow freelance drivers talking about tax deductions? Were you the one politely nodding your head while having no idea what they were saying? Then you should read this.
When you come home from driving all day, the last thing you want to do is deal with your expense reports. Remember that with the Lili app, you can take care of categorizing your expenses on-the-go, while you wait for your next ride in the parking lot, instead of doing it on your own time.
But the question remains: as a driver, what can you actually categorize as a work expense?
So if you drive for a living, here’s a list of expenses you’re likely able to deduct from your income comes tax time (Keep in mind that if you use the same vehicle for work and life, you can only deduct the portions you use for work, so make sure to keep a mileage log of your work rides.).
Car lease or loan payments,
Oil change or any maintenance,
Tires replacements or any repairs,
You got it: pretty much everything that has to do with your vehicle!
Your work phone and phone plan
Cost of your device,
Your cellular and data monthly plan,
Your phone is both your GPS and your main point of contact with your clients, so its costs are tax deductible (remember, don’t text and drive!)
Your car insurance and registration fees
Your insurance premiums and your annual registration on your business vehicle are considered work expenses.
On the street or in a garage, you can deduct your parking fees for your business vehicle.
Gas & Tolls
Gas burnt and tolls paid while you’re on the clock are all tax deductible. Again, don’t forget to keep a mileage log and a record of which rides are business related.
Your car loses value over time and that value can be deducted from your taxes. Find out more information on car depreciation here.
Subscription to music services
What is a ride without a nice soundtrack?! Your subscription to Spotify, Sirius XM, Apple Music or any other music services count as a work expense.
Snacks and beverages
If you offer candies, bottled waters, peanuts, or champagne to your clients for a nicer ride, you can expense these purchases.
If you drive more than 100 miles for a client or to go work an event in a nearby city, this counts as a business trip. In which case, every expense you incur during that trip (hotels, 50% of your meals, gas…) can be deducted from your income comes tax time.
For more details and information, please refer to this IRS article regarding business expenses.