Why this matters

Gig workers (independent contractors, freelancers, rideshare and delivery drivers) pay their own taxes and don’t get traditional employer benefits. Knowing which payments are deductible or tax-free — and how to document them — can reduce taxable income and lower self-employment tax exposure.

How meals are treated

  • General rule: business meals are deductible only to the extent allowed by the IRS (typically 50% of qualifying business meal costs), with some limited exceptions and temporary rules that have applied in prior years. See IRS Publication 463 for details (IRS Publication 463).
  • Substantiation: record the date, amount, business purpose, location, and attendees. Keep receipts and contemporaneous notes — phone apps or a simple expense spreadsheet work.
  • Common scenarios:
  • Meals while traveling for work: typically deductible as a business travel expense (subject to the meals percentage limit).
  • Client meals to discuss business: may qualify as business meals if properly documented.
  • Personal meals or daily meals while working at home are not deductible.

(See our deep dive on business meals: Business Meals Deduction).

How mileage and vehicle expenses work

  • Two options: standard mileage rate or actual expenses. The IRS publishes the standard mileage rate annually — check the current rate on the IRS site before filing (IRS standard mileage rates).
  • Standard mileage method: multiply business miles by the IRS rate. No need to keep receipts for fuel or repairs, but you must keep a mileage log showing date, purpose, start/end odometer or miles driven.
  • Actual expense method: deduct the business portion of real costs (gas, repairs, insurance, depreciation). You must keep receipts and support for each category.
  • Choose the method that yields the larger deduction; rules limit switching methods in certain circumstances (see IRS Publication 463 and our internal guide on mileage vs. actual expenses).

For practical recordkeeping guidance, see: Business Use of Your Car: Mileage vs Actual Expenses and How to Document Business Mileage to Withstand an IRS Audit.

Health reimbursements and self-employed health insurance

  • Self-employed health insurance deduction: self-employed taxpayers generally may deduct health insurance premiums as an adjustment to income on Form 1040 if they and their dependents are not eligible to participate in an employer-sponsored plan. See IRS Publication 535 and the self-employed health insurance rules.
  • Employer-like HRAs (health reimbursement arrangements): employers can offer tax-free reimbursements for medical costs under specific HRA designs (e.g., QSEHRA, ICHRA) when plan rules are followed. Independent contractors usually cannot treat stipends from a client as tax-free unless the arrangement meets IRS requirements for an employer plan.
  • Platform stipends or reimbursements: if a gig platform reports a payment as a reimbursement and it qualifies under an HRA or other tax-advantaged program, it can be non-taxable; otherwise, it is usually taxable income and may be deductible as a business expense if ordinary and necessary.

Real-world example

A rideshare driver documents 10,000 business miles and chooses the standard mileage rate. They also log client-related meals with receipts and short notes about the business purpose. Proper records let them substantiate the mileage deduction and claim allowable meal deductions while reducing audit risk.

Who is affected

Nearly any gig worker who incurs meal, vehicle, or health costs can be affected: rideshare/delivery drivers, independent contractors, freelancers, consultants, and creatives. Eligibility and treatment depend on facts and how reimbursements are structured.

Practical tips (from experience)

  1. Keep contemporaneous records: date, miles, business purpose, client names, and receipts. Apps that log mileage and attach receipts save time and create a record audit-ready.
  2. Separate personal and business expenses: use a dedicated card or account for business purchases when possible.
  3. Decide on mileage method early in the vehicle’s first tax year and retain consistent records; switching methods has limits.
  4. When a platform offers health reimbursements or stipends, ask for written plan details and how the amount is reported (1099 or W-2) before assuming it’s tax-free.
  5. Consult a CPA or enrolled agent for complex arrangements or if reimbursements are large.

Common mistakes to avoid

  • Missing or vague mileage logs (‘‘around town’’ is not sufficient).
  • Treating all meals as 100% deductible; often only a portion qualifies.
  • Assuming a platform’s payment is tax-free without written plan documentation.

Quick FAQ

  • Can I deduct every mile I drive while working? Yes, but you must substantiate business miles. Personal miles are not deductible.
  • Are platform health stipends taxable? Often yes, unless paid under an approved HRA or employer plan — check how it’s reported.
  • Where do I report these deductions? Gig income is reported on Schedule C (or appropriate business form); vehicle expenses and meal deductions are claimed there or as adjustments. See our guide: Filing Taxes as a Gig Worker: Essential Forms, Records, and Tips.

Disclaimer

This article is educational and not individualized tax advice. Tax rules change; verify current rates and specifics with the IRS or a tax professional before filing. In my practice advising gig workers, careful recordkeeping is the most reliable way to protect deductions and reduce audit risk.

Authoritative sources

(Last reviewed: 2025).