Independent contractors managing self-employed taxes should stay proactive about independent contractor deductions and year-round recordkeeping.
Why It Matters for Self-Employed Taxes
Lyft Delivery is still a niche, but it can fill slow passenger hours. Know your numbers before saying yes to every package ping.
Key Earnings & Expense Buckets
- Track insulated bags or cargo space organizers needed for packages.
- Log additional insurance or permit requirements for transporting goods.
- Deduct mileage for delivery only routes separately from passenger trips.
Weekly Workflow
- Compare hourly earnings between passenger and delivery modes in your city.
- Batch delivery pings during midday lulls when passenger demand dips.
- Gather customer feedback to learn which businesses offer repeat delivery work.
Tools & Next Steps
- Spreadsheet comparison of revenue per hour by mode.
- Thermal bags that fold flat when not in use.
- Communication templates explaining delivery status updates to customers.
Use data to decide. If deliveries match or beat your rideshare hourly rate, you have a new profit lever in your toolkit.
How do I track mileage for gig work in 2025?
Use IRS-approved mileage logs or apps like Everlance to document date, distance, and purpose for every self-employed trip.
Can I deduct equipment or vehicle lease payments?
Yes, deduct the portion tied to independent contractor work; keep receipts and lease statements for 1099 tax audits.
When should I pay quarterly estimated taxes?
Send payments by April, June, September, and January to cover self-employed taxes and avoid IRS penalties.
What records should independent contractors keep?
Maintain income statements, mileage reports, receipts, and bank deposits to support deductions and 1099 filings.
How can I reduce surprise tax bills as a freelancer?
Estimate your independent contractor deductions monthly, set aside 25-30% of income, and automate transfers to a tax savings account.