New Year, No Tax Stress: Tips for Tracking Miles & Expenses Seamlessly
The Gist
For independent workers (including rideshare and delivery drivers), one of the most essential tasks is keeping a record of your expenses, including mileage tracking for taxes. This is because when you’re an independent contractor, you’re your own boss—but that means you have to be your own business.
Because independent contractors do not have regular taxes taken out of their income, they are granted access to special tax deductions (also known as write-offs) that are specific to the industry they work in. These deductions can lead to massive savings and refunds when tax season rolls around if you are diligent about tracking expenses for taxes.
Rather than saving every paper receipt or building an endless maze of spreadsheets (like they did in the good old days), the free Stride app can help you track your expenses and mileage. That way, when it’s time to do your taxes, all the information is in one place.
In This Article
Why Is It Important to Track Expenses and Mileage for Taxes?
What Are Some Tips for Maximizing My Earnings as an Independent Contractor?
In Short
According to a study by the consultancy McKinsey, nearly 36 percent of Americans consider themselves independent workers, with that number growing every year. The growth of the independent worker sector owes itself in no small part to the rise of the “gig economy,” a collective name that includes rideshare and delivery drivers (like Uber or Doordash), help-for-hire app workers (like TaskRabbit or Upwork), and an ever-growing list of typically app-based opportunities.
The gig economy is also used to describe the broadly defined field of “freelancers,” who take temporary or project-based jobs in industries like (but not limited to) marketing, media, and writing. With the freedom of becoming an independent contractor comes a number of responsibilities. As we like to say, it’s nice to be your own boss, but that often means you need to be your own business, too.
So what does that mean for you, a gig economy worker who has clicked on this article? Well, that means you’re on the hook for tracking your own income, expenses, miles driven, and other essential details of your business’s day-to-day operations. This is because you’re not on a company payroll, and as a result, you (probably) don’t get taxes taken out of your regular paychecks. The upside is that as an independent contractor, you’ll have access to a number of tax deductions and write-offs, provided you’ve been diligent about tracking your earnings and expenses.
If that feels like a lot to remember, don’t worry—it is! But that’s why we built the Stride app, an easy-to-use, one-stop free app for freelancers who need to track expenses, mileage, and more. Keep reading to learn more about tracking expenses for taxes, filing your tax return as an independent contractor, maximizing your earnings as a rideshare driver, and more.
Why Is It Important to Track Expenses and Mileage for Taxes?
To put it simply, your tax situation is fundamentally different when you’re an independent contractor (1099) vs. a payrolled employee (W-2). The primary difference is that when you’re on a company’s payroll, they typically withhold a certain amount of your paycheck for income taxes. At the end of the tax year, you’ll add up all your W-2s, see how much tax has been withheld, and determine if you owe additional tax payments or are due a tax refund from the government.
Independent contractors, on the other hand, (typically) do not have taxes taken out of their regular payments. This means a 1099 worker is responsible for tracking their own earnings, expenses, taxes paid, and miles driven (if relevant).
While many W-2 taxpayers will opt for the standard deduction when tax season arrives, independent contractors have the option to itemize their deductions. This is where tracking expenses and mileage comes in handy. If your total applicable deductions add up to more than the Standard Deduction, you’ll want to itemize—and this could mean massive tax savings that you can put into your savings or reinvest back into your company.
How Can I Maximize Deductions As an Independent Contractor?
When tax season rolls around, you’ll want to maximize your deductions so you can get the biggest possible refund (or simply minimize your tax burden). To accomplish this, we recommend tracking every expense that you think might be relevant, especially:
Gas
Equipment maintenance
New equipment (like phones, computers, or accessories)
Online subscriptions
Meals (where applicable)
Home office expenses like:
Furniture
Supplies
A portion of costs for mortgage payments, electricity, internet, etc.
What Are Some Tips for Maximizing My Earnings As an Independent Contractor?
Now that you know how to track mileage for taxes, you’re well on your way to a lucrative experience as an independent contractor or rideshare/delivery driver. But the hustle doesn’t stop there (and why would it?). To really maximize your earnings as an independent contractor, you should treat your job like a business. Marketing, improvements, maintenance to your equipment, and having a positive mental outlook can go a long way toward helping make your gig into a full-time job.
We’ve covered some of our favorite tips for maximizing your earnings as a rideshare driver, but if you’re impatient or can’t find the time for the click, here’s a quick rundown:
Have a positive attitude: Almost all independent contractor jobs are client-facing, meaning the person who is paying you is the person you’re providing a service to. A smile and a positive attitude go a long way toward making clients happy and can help maximize your earnings.
Be on the lookout for savings: Use the Stride app for everyday savings on things like gas, food, and other things you need to make your business profitable.
Tracking expenses and mileage for taxes: We sound like a broken record, but this is really important. Having an accurate record of your expenses and mileage can mean massive savings when filing your taxes.
Save Money on Insurance: If you lack comprehensive insurance coverage, use Stride to find the best, most affordable plan available in your area. All you have to do is enter your ZIP code and provide some basic information. Within seconds, you’ll be able to compare and contrast every plan available—you can even enroll directly from our site!
How Does the Stride App Help Track Expenses and Mileage?
If you’re wondering how to track mileage for taxes (as well as other expenses), we’ve got great news—we took care of all the hard parts. All you have to do is download the free Stride app, and you’ll transform your smartphone into an indispensable tool to help with tracking expenses for taxes.
The Stride app is broken up into 5 easy-to-navigate sections:
Mileage Tracker: For anyone who has to track their miles for work (for instance, delivery drivers, rideshare drivers, or various other car-based gigs), mileage tracking for taxes is absolutely essential. All you have to do is turn on the Stride App at the beginning of your work day or shift, and we’ll keep track of how far you drive. Then, when it’s tax season, you’ll have all your mileage for the year in one place—we’ll even help with the calculations!
Everyday Savings: This section of the app includes exclusive discounts toward things you need, like gas, food, and other equipment and services. Although this doesn’t directly have an implication on your taxes, who doesn’t love saving money, right? And we all know how those pennies can really add up at the end of the year.
Tax Tracking and Preparation: Here’s where a lot of the magic happens, especially if you’re tracking expenses for taxes. In this section of the app, you’ll be able to enter your day-to-day income, expenses, and more. The Stride app will even help remind you when Estimated Quarterly Taxes are due and give you an idea of how much you should set aside to make these payments. When it comes time to prepare your taxes, this will be an invaluable resource, as it will keep your income, tax payments, and expenses in one easy-to-access place.
Insurance Coverage: Seamless, in-app access to Stride’s innovative marketplace of insurance coverage, including health, dental, vision, and life insurance. Simply provide your ZIP code and some basic information about your health care needs, and we’ll handle the rest—you can even enroll right from our site!
Relevant Resources: In this section, you’ll find step-by-step guides for enrollment, tips for tracking expenses and mileage, blogs with answers to your burning questions, and more. You’ll even get a quick snapshot of your earnings, expenses, and taxes due—so you’re not surprised when it’s time to file your return.
What Do I Need to Know Before Tax Season?
Here’s a quick checklist of what you’ll need to have before tax season as an independent contractor:
Record of mileage driven
Record of expenses incurred while working
Record of total income earned while working (could be 1099s, spreadsheets, or the Stride app)
Any 1099s provided by the app(s) you work through
Record of any quarterly estimated taxes paid