1099-NEC and 1099-K
Most platforms issue both 1099-NEC (for non-passenger income such as referrals, bonuses, and incentives) and 1099-K (for passenger fares or order payments routed through their payment system). The 1099-K threshold has been in flux — even below the threshold, the income is reportable.
Standard mileage rate
For most gig drivers the standard mileage rate (67¢/mile in 2024) is the better choice because the per-mile depreciation, fuel, and maintenance allowance approximates actual costs without the recordkeeping burden. Track ALL business miles — including return drives after the last trip and miles between trips waiting for the next ping.
Other deductible expenses
Cell phone (business-use percentage), phone holder, charger, dash cam, car cleaning, water/snacks for passengers (if you provide), tolls, parking, vehicle washes, the platform's commission (already netted in some 1099 reporting — verify before deducting again).
Tracking your actual income
Each platform reports differently. Track all platforms in a single revenue ledger and reconcile monthly. The 1099-K reports gross fares before commission — your actual net is much smaller. Schedule C should report gross fares as income and commission as a separate deduction (line 11 contract labor or line 27 other expenses).
Estimated taxes
Gig workers should make quarterly estimated tax payments to avoid the underpayment penalty. A simple rule of thumb: set aside 25-30% of net gig income each week into a savings account dedicated to taxes.
Where the IRS publishes guidance on this topic
The IRS publishes a layered set of free resources on most small-business tax topics: a relevant publication (usually one of Pub 334, 463, 535, 587, 946, 560, or 583), the instructions to the relevant form, the "Small Business and Self-Employed Tax Center" landing pages on IRS.gov, and the Audit Techniques Guides written for IRS examiners. Reading the agency's own materials is the cheapest tax education available. They are written in plain English, updated annually, and they reflect exactly the framework an examiner will apply if your return is selected.
How experienced filers approach this
Experienced self-employed filers and the CPAs who advise them treat this question as a recurring planning exercise rather than a one-time decision. They model the multi-year tax impact rather than just the current year, document the reasoning in a short workpaper that survives staff turnover and software changes, and revisit the analysis annually as facts and laws change. The discipline is not difficult — a half-day in January with last year's return, the current-year IRS publications, and a spreadsheet — but it is rare among DIY filers, which is precisely why it produces outsized results.