Commonly Missed Tax Deductions for Gig Workers

Schedule C, Profit or Loss From Business, is where you'll record income from your job in the gig economy. It is also where you report deductible expenses that you incurred related to that job. The net profit on your Schedule C, which represents your self-employment income minus allowable expense deductions, flows through to your Form 1040, U.S. Individual Income Tax Return.

To maximize your tax deductions, it pays to know which business expenses you can use to offset your self-employment income. Here are some of the most commonly missed tax deductions for gig workers.

Cell phone bill

If you have a dedicated work cell phone that you do not use for personal purposes at all, your tax deduction is straightforward. You simply include the entire bill on your Schedule C. However, if you use the phone for both personal and business purposes, you will need to do some calculations to arrive at the deductible amount.

Personal use of cell phones is nondeductible. However, business use of cell phones is deductible. How do you allocate your cell phone costs between the two? Consider the percentage of your time spent on business versus personal use. If 75% of your time on the phone is for business purposes, you can deduct 75% of the total phone bill.

Software subscriptions

You can deduct the business-use portion of software subscriptions. For example, if you work from home and frequently use Zoom to host meetings with your clients, you can deduct the cost of your Zoom subscription. Other subscriptions to keep in mind include Microsoft Office 365, QuickBooks, and website hosting fees.

What if you paid in advance for a multi-year subscription? You will need to prorate your payment and include only the portion corresponding to the tax year in question.

Electronics purchase

If you make a reasonable and necessary electronics purchase, it is tax-deductible. Of course, like all other deductible expenses, you can only include the expense to the extent you use the item for business purposes. Keep track of your expenses if you purchased a new laptop, desktop, monitor, or printer that you use partially or fully for your job in the gig economy.

Car insurance

You can deduct your car insurance if you use the car for business purposes. Keep in mind that commuting does not qualify as a business expense. If you use your car partially for personal purposes, you will have to prorate the cost of your car insurance. Be sure you keep an accurate record of your car travel, so you have supporting documentation in case the IRS audits your car insurance deductible.

Business meals

Meals are deductible when meeting with clients, traveling for work, or at a business conference. You can deduct the actual expenses from your qualifying meals if you keep your receipts. Business meals are temporarily 100% deductible for the 2021 and 2022 tax years. Normally, business meals are only 50% deductible.

If the cost of your meal includes entertainment, you can only deduct the portion related to the meal. If the meal and entertainment are not specifically identified and separated on your bill, you cannot deduct any of the expenses.

There is a simplified option available as well. You can take a standard per diem rate if you use the Meals & Incidental Expenses (M&IE) on the U.S. General Services Administration (GSA) website.

Business travel

To qualify for the deduction, business travel has to take you away from your tax home, last longer than a typical workday, and require you to get sleep or rest. Expenses that qualify for this deduction include transportation, lodging, and meals. If you don't keep all your receipts, there is a simplified option for lodging. You can take the standard per diem lodging rate on the GSA website.

The important thing to keep in mind with business travel is that you can only deduct the portion that relates to the business portion of your trip. For example, you can deduct the cost of your meals while entertaining clients in Orlando, but you cannot deduct the cost of Disney World tickets for you and your family.

Additionally, if your family joins you on your business trip, you can only deduct the expenses you would have paid if you had traveled alone. In other words, you cannot include the cost of the plane tickets for your spouse or children unless they also work with you.

Gig worker tax deduction FAQs

What are the most common tax deductions that gig workers miss?

Gig workers most often miss deductions for their cell phone bills, software subscriptions, electronics purchases, car insurance, business meals, and business travel expenses. These expenses can add up to thousands of dollars in tax savings each year, but many people don't realize they can claim them.

Electronics like laptops or tablets are deductible too, as long as you use them for your gig work. For example, if you're a rideshare driver who uses your phone 60% of the time for work (navigation, customer calls), you can deduct 60% of your monthly phone bill. The key is keeping good records of how much you use these items for business versus personal use.

How do I figure out what percentage of my cell phone bill I can deduct?

You need to track how much you use your phone for business versus personal activities over a typical month. Keep a simple log for 30 days showing when you use your phone for work-related tasks like navigation, customer communication, or business apps. Add up all your business usage time and divide it by your total phone usage time to get your business percentage.

For instance, if you use your phone 100 hours per month and 40 of those hours are for work, your business use is 40%. You can then deduct 40% of your monthly phone bill. Make sure to save your phone bills and keep your usage log in case the IRS asks for proof.

Can I deduct software subscriptions like Zoom or Microsoft Office?

Yes, you can deduct software subscriptions that you use for your gig work, but only the business portion of the cost. Popular deductible software includes video conferencing tools like Zoom, productivity suites like Microsoft Office 365, accounting software like QuickBooks, and website hosting services.

If you use the software only for business, you can deduct 100% of the subscription cost. If you use it for both business and personal activities, you need to calculate what percentage is for business use. Keep your subscription receipts and track how you use the software. If you pay for multiple years upfront, you need to spread the deduction across those tax years instead of claiming it all at once.

What vehicle expenses can I deduct as a gig worker?

You can deduct car expenses related to your business driving, but not your regular commute to and from home. This includes the business portion of your car insurance, gas, repairs, oil changes, and other maintenance costs.

You have two ways to calculate this deduction: the standard mileage rate (70 cents per mile in 2025) or tracking your actual expenses. Most gig workers save more money using the standard mileage rate because it's simpler and often results in a bigger deduction. Keep detailed records of your business miles, including the date, starting point, destination, and business purpose for each trip.

When can I deduct business meals, and how much can I claim?

You can deduct 50% of business meal costs when you eat during client meetings, business travel, or work conferences. The meal must have a clear business purpose, and you need to keep detailed records, including receipts and notes about who you met with and why. Since 2023, meals have been 50% deductible. You cannot deduct entertainment costs (like concert tickets) even if you're with clients, and you must separate meal costs from entertainment on your receipts.

What counts as deductible business travel expenses?

Business travel expenses are deductible when you travel away from your home area for work and need to stay overnight or rest before returning. You can deduct transportation costs (flights, rental cars), hotel rooms, and meals during these trips. The travel must be for business purposes, last longer than a normal workday, and take you far enough from home that you need to sleep or rest. Only the business portion of mixed business-personal trips is deductible, so you need to separate costs carefully.

What records do I need to keep to claim these deductions?

You need to keep detailed records for all business expenses, including dated receipts, usage logs, and notes explaining the business purpose. The IRS requires you to prove both that you spent the money and that it was for legitimate business reasons. For each deduction, save itemized receipts, track business versus personal use percentages, and write down why the expense was necessary for your work. Digital records are acceptable, so you can take photos of receipts and use apps to track mileage and expenses automatically. Keep all records for at least three years after filing your tax return.

What are the most common tax deductions that gig workers miss?

Gig workers most often miss deductions for their cell phone bills, software subscriptions, electronics purchases, car insurance, business meals, and business travel expenses. These expenses can add up to thousands of dollars in tax savings each year, but many people don't realize they can claim them.

Electronics like laptops or tablets are deductible too, as long as you use them for your gig work. For example, if you're a rideshare driver who uses your phone 60% of the time for work (navigation, customer calls), you can deduct 60% of your monthly phone bill. The key is keeping good records of how much you use these items for business versus personal use.

How do I figure out what percentage of my cell phone bill I can deduct?

You need to track how much you use your phone for business versus personal activities over a typical month. Keep a simple log for 30 days showing when you use your phone for work-related tasks like navigation, customer communication, or business apps. Add up all your business usage time and divide it by your total phone usage time to get your business percentage.

For instance, if you use your phone 100 hours per month and 40 of those hours are for work, your business use is 40%. You can then deduct 40% of your monthly phone bill. Make sure to save your phone bills and keep your usage log in case the IRS asks for proof.

Can I deduct software subscriptions like Zoom or Microsoft Office?

Yes, you can deduct software subscriptions that you use for your gig work, but only the business portion of the cost. Popular deductible software includes video conferencing tools like Zoom, productivity suites like Microsoft Office 365, accounting software like QuickBooks, and website hosting services.

If you use the software only for business, you can deduct 100% of the subscription cost. If you use it for both business and personal activities, you need to calculate what percentage is for business use. Keep your subscription receipts and track how you use the software. If you pay for multiple years upfront, you need to spread the deduction across those tax years instead of claiming it all at once.

What vehicle expenses can I deduct as a gig worker?

You can deduct car expenses related to your business driving, but not your regular commute to and from home. This includes the business portion of your car insurance, gas, repairs, oil changes, and other maintenance costs.

You have two ways to calculate this deduction: the standard mileage rate (70 cents per mile in 2025) or tracking your actual expenses. Most gig workers save more money using the standard mileage rate because it's simpler and often results in a bigger deduction. Keep detailed records of your business miles, including the date, starting point, destination, and business purpose for each trip.

When can I deduct business meals, and how much can I claim?

You can deduct 50% of business meal costs when you eat during client meetings, business travel, or work conferences. The meal must have a clear business purpose, and you need to keep detailed records, including receipts and notes about who you met with and why. Since 2023, meals have been 50% deductible. You cannot deduct entertainment costs (like concert tickets) even if you're with clients, and you must separate meal costs from entertainment on your receipts.

What counts as deductible business travel expenses?

Business travel expenses are deductible when you travel away from your home area for work and need to stay overnight or rest before returning. You can deduct transportation costs (flights, rental cars), hotel rooms, and meals during these trips. The travel must be for business purposes, last longer than a normal workday, and take you far enough from home that you need to sleep or rest. Only the business portion of mixed business-personal trips is deductible, so you need to separate costs carefully.

What records do I need to keep to claim these deductions?

You need to keep detailed records for all business expenses, including dated receipts, usage logs, and notes explaining the business purpose. The IRS requires you to prove both that you spent the money and that it was for legitimate business reasons. For each deduction, save itemized receipts, track business versus personal use percentages, and write down why the expense was necessary for your work. Digital records are acceptable, so you can take photos of receipts and use apps to track mileage and expenses automatically. Keep all records for at least three years after filing your tax return.