Updated October 2019
There’s been an explosion of on-demand apps that deliver food straight to your doorstep. Of course, this is a well-worn tradition for pizza restaurants. Can the pizza delivery drivers and on-demand food deliverers claim their mileage on taxes?
Are you an employee or an independent contractor?
The first thing to determine is whether you’re an employee or an independent contractor. While there are many specific details to determine your status, it generally boils down to three major tests:
- How much control does the hiring party have over the person who’s hired?
- How much financial control is there?
- Do you reasonably believe you’re an employee?
Many of the on-demand food delivery apps follow the Uber model where drivers are independent contractors. In my experience, many pizza delivery drivers are W2 employees. This matters because it’s generally easier for self-employed workers to deduct their mileage for work.
How much are my delivery miles worth?
Your business miles could be worth 58 cents per mile. That may not sound like a huge amount but over time, that can really add up to a large chunk of change. If you drive 20 business miles a day on deliveries, that could be up a $2,784 mileage deduction at tax time (assuming you work five days a week for a year).
Remember, the more deductions you can legally claim, the less income you have to pay taxes on. That means more money back in your pocket that you can use on your own business or anything you’d want … including pizza.
Employees: Does your employer provide reimbursement?
If you are a W2 employee who drives to deliver food, you may still be able to claim a mileage deduction. You may receive mileage reimbursement for your driving and if it’s below the 58 cents per mile, you may be eligible for partial mileage reimbursement. This is limited because it’s a miscellaneous itemized deduction, so check with your Tax Pro to see if it’s worth it.
What proof do you need for a mileage deduction?
Of course, the IRS isn’t going to take your word for it. If you want to claim mileage on taxes, be sure to have a compliant mileage log. This means recording:
- Your beginning vehicle mileage
- The mileage of your trips
- The dates of your business trips
- The places you drove for business
- A business purpose for each of your trips
The IRS also will ask for the total amount of commuting miles and non-commuting personal miles. If you want to keep records that stand up to IRS scrutiny, you’re going to need to track and log all your drives.
How can I claim my mileage for pizza delivery?
If you’re a self-employed worker at a pizza restaurant or an on-demand food company, you can deduct your vehicle expenses on your Schedule C. If you’re using the standard mileage rate for your deduction, you can enter your total deduction on Line 9. If you’re using a mileage-tracking app like MileIQ, we’ve put together a quick guide that shows you how to get the information you need for tax time.