Delivery drivers can deduct car costs in two ways: the IRS standard mileage rate or actual expenses. For most drivers who put a lot of miles on a fuel-efficient car, the standard mileage rate gives the bigger deduction and needs far less paperwork. Actual expenses can win when your vehicle is expensive to buy and run, or when you drive fewer miles. Here is how each method works in 2026, with real numbers, so you can pick the right one.
Key points
- Standard rate for 2026: 72.5¢ per business mile from January 1 to June 30, and 76¢ from July 1 to December 31
- Actual expenses = the business share of gas, insurance, repairs, tires, registration, depreciation or lease payments
- If you own your car, you must choose the standard rate in the first year you use it for business, or you lose that option for that car
The two methods in plain English
As a DoorDash, Uber Eats, Instacart or Amazon Flex driver, you are self-employed. You report your car costs on Schedule C, and they lower your profit. A lower profit means less income tax and less self-employment tax. The IRS lets you choose how to calculate those car costs.
Standard mileage rate
You multiply your business miles by a flat rate set by the IRS. The rate is meant to cover gas, oil, maintenance, tires, insurance, registration and depreciation. You do not add those costs separately. For 2026 the rate changed in the middle of the year, so you calculate each half separately. Our guide to the 2026 IRS mileage rate explains the change.
Actual expenses
You add up what your car really cost you during the year, then deduct only the business share. The IRS lists these actual car expenses:
- Gas and oil
- Repairs, maintenance and tires
- Insurance
- Registration fees and licenses
- Depreciation (if you own the car) or lease payments (if you lease it)
- Garage rent, tolls and parking fees
Your business share is your business miles divided by your total miles for the year. If you drove 20,000 miles and 15,000 were for deliveries, your business use is 75%, so you deduct 75% of the total.
What you can deduct with either method
Some costs are deductible on top of the standard rate, so they do not change your choice:
- Parking fees and tolls for business trips
- The business share of interest on your car loan, because you are self-employed
- The business share of personal property tax on the car, in states that charge it
Costs that are not about the car, such as your phone plan, insulated bags or a phone mount, are separate business expenses under both methods.
Worked example 1: full-time driver with a hybrid
Ana drives a paid-off compact hybrid. In 2026 she drives 20,000 miles in total, and 18,000 are business miles: 9,000 before July 1 and 9,000 after. Her business use is 90%.
Standard mileage rate:
- 9,000 × $0.725 = $6,525
- 9,000 × $0.76 = $6,840
- Total: $13,365
Actual expenses (her real costs for the year, as an example):
| Expense | Amount |
|---|---|
| Gas (about 450 gallons) | $1,500 |
| Insurance | $1,800 |
| Oil changes and repairs | $900 |
| Tires | $400 |
| Registration | $150 |
| Depreciation | $3,000 |
| Total | $7,750 |
| Business share (90%) | $6,975 |
The standard rate gives Ana $6,390 more in deductions. This is the typical result for delivery drivers: a cheap, efficient car driven many miles costs much less per mile than the IRS rate.
Worked example 2: part-time driver with a large SUV
Derek bought a large SUV that gets about 15 miles per gallon. He drives 12,000 miles in 2026, and 9,600 are business miles: 4,800 in each half of the year. His business use is 80%.
Standard mileage rate:
- 4,800 × $0.725 = $3,480
- 4,800 × $0.76 = $3,648
- Total: $7,128
Actual expenses (example amounts):
| Expense | Amount |
|---|---|
| Gas (about 800 gallons) | $2,650 |
| Insurance | $2,400 |
| Oil changes and repairs | $1,500 |
| Tires | $800 |
| Registration | $400 |
| Depreciation | $6,000 |
| Total | $13,750 |
| Business share (80%) | $11,000 |
Here actual expenses win by $3,872. The reasons are a costly vehicle with high depreciation, poor fuel economy and fewer miles. Keep in mind that depreciation follows its own IRS rules and yearly limits, so the real figure for your car can be different. This is where a tax professional is worth it.
To find out where you stand, calculate your own cost per mile: divide your total car costs by your total miles. If the result is well under the IRS rate, the standard rate is almost always better. Our free driver tools help you run these numbers.
The rules that lock in your choice
This is the part many drivers miss. The choice you make in the first year can limit you for as long as you keep the car.
If you own the car
- To use the standard rate, you must choose it in the first year the car is used for business.
- If you start with the standard rate, you can switch to actual expenses in a later year. You must then use straight-line depreciation over the car’s remaining useful life.
- If you start with actual expenses and use accelerated depreciation (MACRS), a Section 179 deduction or bonus depreciation, you cannot switch to the standard rate later for that car.
In practice, starting with the standard rate keeps both doors open. Starting with actual expenses often closes one.
If you lease the car
If you choose the standard rate for a leased car, you must use it for the whole lease period, including renewals. If you choose actual expenses, you deduct the business share of your lease payments, and you may have to reduce the deduction by a small “inclusion amount” from an IRS table.
Five or more vehicles
You cannot use the standard rate if you use five or more cars for business at the same time. This rarely applies to individual drivers, but it matters if you run a small delivery fleet.
What happens when you sell the car
The standard rate includes a depreciation part. For 2026, IRS Notice 2026-10 sets it at 35 cents per business mile. That amount lowers your car’s tax basis each year. For example, 18,000 business miles reduce the basis by $6,300. When you sell the car, a lower basis can mean a taxable gain. With actual expenses, the depreciation you claim lowers the basis the same way. Either way, keep your purchase papers and your yearly mileage totals.
Records you need for each method
Both methods need a mileage log, because you must prove your business miles and, for actual expenses, your business-use percentage. Keep the date, the miles and the purpose of each workday, plus your odometer reading on January 1 and December 31. Our guide on how to track your mileage shows simple ways to do it.
Actual expenses also need every receipt: gas, repairs, insurance bills, registration, and the purchase or lease contract. That is a lot more work than a mileage log alone.
Where it goes on your tax return
Car costs go on Schedule C (Form 1040), line 9, “Car and truck expenses”. With actual expenses, depreciation goes on line 13 and is figured on Form 4562. You also answer the vehicle questions in Part IV of Schedule C or on Form 4562.
Frequently asked questions
Can I deduct gas and the mileage rate at the same time?
No. Gas is already included in the standard rate. You pick one method per car for the year.
Can I switch methods every year?
If you own the car and used the standard rate in the first year, yes, you can choose either method in later years, with straight-line depreciation if you move to actual expenses. If you lease, the standard rate must be used for the whole lease once you choose it.
Which method do most delivery drivers use?
Most use the standard rate. Delivery work means many miles in a normal car, and at 72.5 to 76 cents per mile the flat rate is usually higher than real costs. It also needs much less paperwork.
Do I still need receipts with the standard rate?
You need a mileage log, plus receipts for parking and tolls, which you deduct on top. You do not need gas or repair receipts for the car deduction.
This article is general information, not tax advice. Your situation may differ, so check with a tax professional before you choose.
