It's tax time and you didn't track your miles as an independent contractor delivering for Doordash, Grubhub, Uber Eats, Instacart or others.
Is it time to panic?
Maybe you didn't know you need to. Perhaps you didn't think you needed it. Maybe you didn't realize you CAN claim your miles even when taking a standard deduction.
All you know is… that's a lot of taxes you owe. Is it still possible to claim your miles?
You can breathe a sigh of relief. If you did forget to track your miles when delivering for these gig companies (or other business miles) it may still be possible to capture many of the miles that you drove.
We'll walk through what you can do to create an acceptable mileage record that meets IRS requirements. We'll discuss:
Here's the deal with miles: It's easy for people to abuse this deduction. It happens all the time. In fact, the kind of miles we drive already puts us at a higher risk for audit.
You want to keep an accurate record of your miles, both to capture every mile AND to satisfy the IRS if they start asking if your numbers are legit.Track your miles, keep your money
The IRS requires the following:
You need to know your odometer reading at the start and the end of the year. That's because they want the total miles for each vehicle you use.
You then need a daily record that shows the date, the number of miles you drove, the business purpose of your trip, and where you went.
It is allowable to record those miles with a GPS app or with a hand written mileage log (or spreadsheet). The main thing is that whatever method you use captures those four criteria. This means you need a daily record.
Okay, so you're getting ready to do your taxes and you don't know how many miles you drove.
The worst thing you can do is just make it up or write down a number.
If you claim miles without any record, you can expect an auditor to disallow that. When that happens, you may not to claim ANY miles OR actual car expenses.
You HAVE to have documentation of your miles.
There is good news. The IRS did make an allowance for when you don't have complete records. You CAN go back and retroactively build a mileage log,Statement from IRS Publication 463 related to incomplete records for your business expenses.
I like that they used delivery as an example.
For example, the nature of your work, such as making deliveries, provides circumstantial evidence of the use of your car for business purposes. Invoices of deliveries establish when you use the car for business.IRS example in Publication 463 (2020) about if you have incomplete records .
Here's what it boils down to: You can create a log but you cannot just make it up. The IRS wants evidence to support that log.
You will need to provide three things to the IRS:
That's a lot of extra work. Isn't it easier to just make up a mileage log and not bother with it?
It's easier, but it's risky. Auditors are smart and they get a good feel for when things are simply made up. There are a lot of telltale signs. If they suspect that your log was not kept as you went along, and you haven't done the above steps, you run the risk of losing that mileage deduction.
Here are some steps that you should follow:
In the IRS example quoted above, they said invoices of deliveries provides evidence that you did use your car for business. This is a good starting place.
As delivery contractors, we don't have invoices. But you can gather evidence that shows you were paid for deliveries.
Get as much detail as you can. We'll go into more detail about where you can find that detail.
Here's the thing: If you're recreating a mileage log, there will be a suspicion that you made it all up.
If you can find your maintenance records for any work done on your car, or any receipts that show your odometer readings, that establishes how many miles you drove. If you made up miles, it's very possible you report more miles than you actually drove. Maintenance records provide a baseline to show how many miles you drove overall.
Your closest record to the start of the year and the closest one to the end of the year help you establish how many miles you drove overall for the year. This will be especially valuable if you are using the actual expense method as allows you to calculate the business percent of your miles.
You cannot just grab miles out of thin air. Whatever miles you claim have to have a basis. We'll talk about some ways you can determine how many miles you drove.
Remember the four things the IRS requires for a compliant log: Date, miles driven, business purpose and where you went.
That means you need a log that meets all that criteria. You cannot just provide a total number of miles. That means the emails you get from Doordash or Grubhub or the mileage summary on the tax record for Uber Eats will not meet the requirement. You have to break it down.
Also remember that you need evidence for each record. How did you determine how many miles you drove?
Here's where your evidence for what days you delivered helps. If you have a pay record that shows you drove a certain day, that's your starting polnt for which dates you need a record.
I'm old school, the kind to like printing everything out and putting it in a physical file folder. If all of your evidence is digital, you could keep it in a special folder on your computer.
You want to have it where you can access it easily if it's ever needed.
There are a lot of places you can go. You may have to go to several of them. Most likely, no one piece of information is going to give you what you need to create your mileage log. We'll look at some examples from different food delivery services. We can't touch on all of them, however the examples can help you think of where to look with other platforms.
First, you want to establish that you did in fact use your car for business. The other thing you want to do is get documentation that shows what days you did deliver.
This does two things for you:
We'll talk about the three main delivery platforms as examples for you:
Grubhub: Unfortunately, Grubhub doesn't do a great job of giving you much access through their app. You can pull up a history, but it will only go back so far. However, Grubhub does email a daily summary of earnings for any day that you did deliver, and also sends a weekly summary.
Uber Eats: With Uber Eats, you can tap on the earnings tab and find an history of any of the deliveries you've completed for them. Even better, you can log into the driver portal and download weekly pay statements that list pay for every delivery you've completed.
Doordash: Doordash is the worst of the bunch. They do not email an earnings summary to you. Nor do they provide any form of downloadable summary. All you can do on Doordash is go into your earnings tab. You'll need to take screenshots to get that documentation. Unfortunately, Doordash only provides about six months worth of records. They put a link on their website where you can request a history. I tried it and their response? We don't have a history for you, but you can go into your earnings tab on the Dasher app.
There are some apps that can log into your driver accounts and pull your earnings histories. They use a third party company called Argyle to connect to your driver app. Argyle provides a layer of protection so that the apps cannot access your personal information or even your login and password.
Once you've set it up, you can get daily earnings reports from these apps.
Logging another app into your driver accounts could be a cause for concern. I wrote about how Doordash's most recent terms of service added language that would make me cautious about using a third party app . Grubhub has sent warnings out to drivers about providing login information to someone else, and I'm pretty sure that's in response to third party apps.
I have yet to see any documented case of someone being deactivated for using such an app. In an interview with Harry Campbell, Argyle COO Billy Marsden argued that the data from your earnings belongs to the drivers and they have a right to access that information.
Ultimately, you have to make up your mind. If it means getting access to the documentation that an app won't give you otherwise, I would think it's a justified use of such an app.
Two apps that I know of are PARA and Gridwise. With both, you can see your earnings for any trip going back to your first delivery on supported platforms. Gridwise will give you a downloadable report of your daily earnings.
Fortunately, there are a number of places where we can find actual evidence of miles that we drove. We'll look at a couple of options:
Your GPS app may have been keeping a history without you even realizing it.
There are several ways to track your miles.
The best way to prevent ever forgetting to track might be using the Triplog app. Triplog was the most accurate mileage tracking app when I compared several gps apps .
Triplog has a Gig Apps mode that senses when you are active on a driver app and starts recording miles automatically. I haven't seen any other app that does such a thing.
You can use my referral link for a 20% discount . Full disclosure: I get small referral fee for any purchases from my link.
Hurdlr has what is in my opinion the best free tracking app. However, automatic tracking only comes with the subscription version. I like the app in general, but they recently raised their price well above Triplog's.
If you have Google Maps on your phone, you may be in luck. This is actually kind of creepy when you think about it, but there's a good chance that Google Maps has a record of almost everywhere you've been with your phone.
I told you that was creepy.
But it's good news if you're scrambling to identify miles that you can claim on your taxes.
The ability to track has to be enabled. You may or may not have it enabled on your phone. I'm not sure what the default is. I can tell you that I never intentionally enabled anything, but Google shows me where I've been almost every day of my life since March 2017.
Did I mention that was a bit creepy?
You can find out if you have a history by tapping the menu (normally the 3 or 4 lines at the left of the search box) and then search for “Your Timeline.” You can see more about how to do that here:
Google timeline doesn't track every part of your trip in the same way that a tracking program will. It's more like it takes a look where you are, then a couple minutes later it looks again, and it calculates your distance between points. What that means is it won't likely capture every mile you drove.
In this screenshot I'm guessing that it wasn't tracking for part of the trip. At some point it figured out it hadn't been tracking, and just put a straight line between the points it stopped and started.This route shows the angle when Google maps wasn't recording and just calculated a straight line between the two points it did record
Here's one really good thing with Google Maps. You don't have to have it in navigation mode for it to record. It just seems to track you.
Wherever you go.
I keep saying it's creepy. But if you haven't been tracking, that creepy thing may have saved you a ton of money, because now you have a record of where you drove on those days that your earnings records tell you you drove.
Waze also keeps a history feature, but not as full fledged. You can disable the history and you can delete records. The history is stored in a list of Drives.
Now the problem is, if you weren't using them for navigation, Waze probably didn't record the trip. You have to pull up the history trip by trip rather than seeing a total route for the day.
It's not as easy to get to the history. First, you have to have created an account (I ran Waze for the longest time without doing so). Then you have to go to a browser and enter https://waze.com/editor and then select Drives to see a list of trips.
If you navigate with Waze everywhere you go, you can pull up enough data to capture most of your miles.
Or if you are like me, where I don't tend to navigate to the restaurants since I know where most of them are, you may be missing half your miles.
If you have partial information that shows you were in one place, and the next record shows you starting at another, It is reasonable to calculate those miles and add them in to your totals. Do not estimate, but calculate. We'll get into that further down.
I don't have an iPhone and never have. All I can tell you is what I see when I search for how to find location history.
The problem that I see there is that it looks like the results show everything grouped by location. That could make it very cumbersome to try to put together a timeline based on your location history. You may have to do a lot of calculating distances between locations.
Grubhub and Uber Eats in particular provide some information that at least give you something to go on.
If you drive primarily with Grubhub, you can pull a lot of your mileage information off the pay reports. In the times that I've compared, the mileage that they calculate for the trip (from ping to dropoff) CURRENTLY tends to be pretty on target with what the actual distance is.The Grubhub daily pay summary breaks down the pay in miles for each delivery
At the very worst, you can go through your earnings reports and add up the miles from each trip. It's time consuming but worth it when you consider that it can reduce your liability dramatically.
This doesn't capture any of the miles between when you drop off an order and when you get the ping for the next order. Obviously, it doesn't capture any miles driven for any other platform.
Grubhub doesn't track your miles. What they display is their calculation of how far you go. If on a delivery when you get the offer, my experience tells me the calculation starts with your dropoff point rather than where you are when you receive the offer. This means you aren't in danger of double-claiming any miles.
If you are looking for miles from before about March, 2019, be aware that there was a dramatic shift in the accuracy of the Grubhub miles when they changed the pay model .
Any pay records prior to that change calculated based on a straight line measurement from the restaurant to the customer. They did not capture miles driven to the restaurant. If you know your Pythagorean Theory, you know that straight line measurement is also costing you some miles.
You lose a lot of miles using this method for trips under the old pay model. Unfortunately, if you have no other documentation, those are probably the only miles you'll be able to claim legitimately.
Uber Eats also provides a mileage amount on the delivery summaries. Unfortunately they are still measuring miles as being from where you pick up the food to the drop off.
Those miles are estimated based on the most efficient route (not on straight line like the old Grubhub model). Even still, you are losing half your miles when relying on the Uber Eats reports.When you drill down into the detail of a delivery in your Uber Eats earnings report, you can see a map and how many miles they calculate from the restaurant to the customer.
One difference between your documentation from Grubhub and that of Uber Eats is that you do have a map that shows the general location on your Uber Eats deliveries. If you have consecutive Uber Eats delivery records, it is reasonable to calculate the distance between where you dropped off an order and where the next restaurant is.
We'll touch on that more in a bit.
If youj're relying on Doordash and their information, may God have mercy on your soul! Doordash is…. not very good.
Okay, they are horrible when it comes to providing information.
They do not email pay summaries. They do not keep pay weekly summaries on line. Yes, you can tap on earnings and see what you earned for the week, however they only keep the past few months available.
And even in the information available on the earnings tab, there is no mileage statement of any kind.
In February of 2021, I received an email with an estimate of my total miles. Doordash did not provide any form of daily summary. I track every delivery, so I knew how many miles I drove on Doordash deliveries. Their estimate was about 85% of the actual miles I put into Doordash trips.
I was a little surprised, as that's a lot better than how they used to calculate miles in the past. Still, a single email won't satisfy the IRS as it's not IRS-compliant. The other thing is, relying on that would have cost me about 15% of my tax deduction.
Update: In early 2022, Doordash has been testing a pilot program in which they actually track miles and then email a weekly update. As of this update there's no word on if they'll make that a permanent feature.
Once upon a time you could pull a daily estimate of your miles for the previous year. They kept a record at Driver.Dasher.com. I didn't hyperlink that because the link no longer appears to work.Sample Doordash Miles Report (with a lot of empty mile dates cut out) from 2018
Let me be blunt: If you are relying on this mileage report, you cost yourself a lot of money by not tracking. You can claim some miles, but not nearly enough.
If you can't read it in the image, this is how Doordash says they track the deliveries:
“To estimate your mileage for a particular date, we look at al lthe deliveries you completed, and the times that you marked the pickups and drop-offs as complete. Then we add up the distances between the pickups and the drop-offs. Our estimates only include the distances that you traveled while transporting an order. We don't generally include distances from one drop-off to the next pickup. All of the distances are computed in a straight line fashion, because, as there is no required route, we cannot calculate based on the actual roads you took.”Doordash description of how they calculate miles.
There are a few problems here. They marked where you were when you marked that you picked up the food, and then calculated the distance. If you forgot to mark it as picked up, you cost yourself some miles.
The other problem is they did the same thing as the old Grubhub pay model. No miles to the restaurant were captured even though those can be legitimately claimed, and the straight line measurement is shorter than turn by turn calculations. Generally the report only captured about a third of your total miles.
It's kind of absurd when you think about it. Doordash displays how far you will drive when they offer you a delivery. It's not that hard for them to have kept track of that.
Either way it's a moot point. Doordash no longer provides such a report, and it doesn't appear the old reports are available any longer.
I mentioned that Doordash sent an email in February of 2021 telling me how many miles they show I had driven. Grubhub also sent an email (which was a fiasco). Uber Eats provides a “miles driven” number on their tax forms.
Unfortunately, none of them are IRS compliant. None of those provide a daily detail.
Would an auditor accept an email like that? I can't tell you yes or no. It depends on how merciful they feel. Technically, a single year end number doesn't match their requirement. However, it does provide some form of evidence that you drove a certain number of miles.
Ultimately that's up to the discretion of the auditor.
At the end of 2020, Para devised an algorithm where they could sift through trip data from your apps including time that you are active on deliveries. Based on your activity, they could put together an evidence based log, including the date and miles.
David Pickerell, CEO of Para, told me they spent quite a bit of time going back and forth with tax lawyers and experts to make sure the information they provided was IRS compliant and that it met the requirements for reconstructing an acceptable mileage log.
I had them run my numbers, and the total they came up with was within 3% of the actual total, which was not bad at all. I have no idea whether they're consistently that accurate, but I was impressed.
That feature went away as they evolved into other features such as their Tip Transparency. The last I knew, they do intend to bring that feature back in time for tax season early in 2022.
Update: it does not appear that Para will bring that feature back in 2022. The last I checked, it was not on their radar.
You can check out the Para app here .
There are instances where you can legitimately calculate some distances.
Do not confuse calculating with estimating.
If you have evidence that shows you were at one location and then were at another location as part of your business driving, it is a reasonable assumption that your miles between those locations are business miles.
Be absolutely careful that you have not tracked any other miles for that day that could be a duplication.
I'll use an example of using Waze. I tend to only use GPS when driving to the customer. I know most of the restaurants in my market, so I rarely navigate to them. If my history on Waze only tracks when I'm actually navigating, I'm missing out on a lot of miles because of that.
However, in a delivery situation, it's reasonable to say that your trip from the end point of the last time you used Waze to the start point of your next navigation trip would be business miles. You can calculate the distance between those two poings.
Similarly you might use the calculation method on Uber Eats deliveries. The earnings records on Uber Eats deliveries only gives you miles from the restaurant to customer. Howver, they provide a map with start and stop points. You can calculate distance between the stop point of one delivery and the start point of the next.
If you use such calculations, you want to make sure to keep screenshots or downloads of the information that you used to make your calculation. Make a note in your written statement that you calculated based on this information.
If you do calculate, you want to document it. And you want to use a good source. Do not estimate.
In the example of where you have an Uber Eats map: Uber does not provide exact addresses. However, you can identify the major intersections nearby. Then you Google it.
Ask Google: “Directions from Hampden and Santa Fe to Broadway and Mississippi.” It took me about 10-15 seconds to search for that and screenshot it.
I mentioned keeping screenshots of any maps you used. It doesn't hurt to keep a screenshot of your calculation as well.
It's real easy to say “I know I drive so many miles per hour, or so many miles per day.”
Maybe you noticed that you average about 3/4 mile of driving for every dollar you earn when you do track. But you didn't track on Saturday and you made $100. Based on that average it can be tempting to estimate you drove 75 miles that day.
I'm not going to tell you what to do there. It's kind of like what we talked about a bit ago with the year-end mileage totals. It really comes down to the discretion of an auditor if it ever comes to that.
Para's estimation tool that I talked about did something similar. The data they had available to them gave them information such as how much time a delivery took. They could look at all of that information and make estimates of how long you may have driven.
I'm not going to suggest that you estimate at all. However, if you have nothing else at all, you want to make sure you are very thorough in how you are coming up with your estimate. Be fair. The more you try to claim extra miles by estimating, the higher your risk of the estimate not being accepted.
In your written statement, explain in detail HOW you came up with your estimate. Explain your basis for your calculation and why it's a legitimate basis.
Remember that you can't just rely on an overall total.
The IRS says you can build a retro-active record, but it has to be based on evidence.
Write a statement explaining exactly how you came up with the numbers you have, and what your evidence is to show that the numbers are legitimate.
Pull your earnings information, identify the days that you drove, and calculate your miles for that day using the evidence you found in your research.
That means it is going to take some homework. When I told people they can go through their emails to get the totals, I've had many come back and say, “but that could take hours!”
Yes, it could. Which is why you should have been tracking to begin with. But look at it this way: You're getting paid for those hours.
What I mean is, every mile you have a record of lets you reduce your taxable income by 56 cents (for 2021, 58.5¢ per mile in 2022 ).
That 56 cent deduction reduces your tax bill typically by 9 to 15 cents. I know, that's literally pennies. However, with as many miles as many of us put on our cars, it adds up.
1,000 miles in recovered mileage is $90 to $150 less tax liability. 10,000 miles could mean paying $1500 less.
Is that $1500 worth all those hours of work? Look at it this way: If you're making $30 per hour in deliveries, that's 50 hours worth of deliveries.
You already know the requirements from the IRS. You need a record of your miles that includes:
There are two good ways to do this.
You can keep a log manually. Record your odometer reading at the start and end of your trip and write down all the things in that log.
There are GPS tracking apps that can record for you. The free ones tend to require you to manually start and stop recording. If you're prone to forgetting, you might consider Triplog, which will automatically start tracking your miles any time you are active on one of the delivery apps.
Continue reading for more detail on how to track your miles .
Hurdlr has a free version and a paid version. You can track your miles and record your income and expenses. Available for Android and IOS – learn more here.