According to researchers at Statista, the average business trip costs over $309 per day in expenses. Fortunately, the IRS recognizes these creeping costs have a major impact on your bottom line. That’s why the tax body allows you to claim back certain travel expenses as tax deductibles.

The IRS has all sorts of long-standing rules in place for old-school modes of travel. But with the advent of popular ride-sharing services like Uber and Lyft, you might be wondering: can you deduct Uber expenses on your tax return?

Unfortunately, the answer is a little bit complicated. That’s why we’ve created this quick guide to walk you through the rules on travel-related expenses, how to deduct business miles and Uber rides, and what records you need to keep for your tax returns.

Key takeaways

• Uber fares qualify as tax deductible if the costs are associated with ordinary or necessary business travel.

  
  

• You’re not allowed to deduct Uber rides from your tax return if they’re part of your commute or for personal reasons.

  
  

• If you’re claiming Uber rides as an expense on your taxes, you need to keep detailed records of those rides for at least three years.

Can You Deduct Uber Rides on Your Tax Return?

The short answer is: yes.  

You can deduct some Uber rides as deductibles on the next tax return you send over to the IRS. But the IRS has a couple of key rules and definitions that definitely limit your ability to make a claim.

Let’s break it down.

The IRS defines a travel expense as all of the “ordinary” and “necessary” expenses you’ve got to pay when traveling away from home for your business, job, or profession.

An “ordinary expense” is just any cost of travel that’s common in your business or your trade area. By contrast, a “necessary expense” is one that would be advantageous and appropriate (but not required) for your business.

For example, you could chalk up a visit from your office to meet a potential client as a necessary travel expense. Although it might not be required for the survival of your business, it’s going to increase your prospects — which the IRS concedes is a valid expense.

In the context of ride-sharing companies like Uber or Lyft, the implication here is that your claims are limited to legitimate business expenses. 

You can’t try to deduct a $25 ride to a nightclub or a $30 ride to take your family to the city zoo. 

But if you need to meet one of your clients at their office on the other side of town, any Uber fare you generate as a result of that travel will qualify as a necessary travel expense.

That makes it tax-deductible — but only as long as you’re not claiming for your commute.

The IRS doesn’t allow tax filers to deduct commuting expenses. For reference, the IRS defines a commuting expense as any travel between your home and your regular place of work. Any expense you accumulate as a result of travel to and from work is considered personal and non-deductible.

It doesn’t matter how costly your daily commute is, and it doesn’t matter whether you’re taking the bus or getting a daily Uber driver to ferry you into the office. Taking an Uber from home to work is non-deductible.

What’s the Difference Between Work-Related Travel and Commuting?

The key difference between work-related travel and commuting is that work-related travel is limited to journeys between your place of work and other work-related places.

At first glance, work-related travel and commuting may look pretty similar. After all, getting an Uber to work is definitely related to your job, right? 

Despite the tenuous link, the IRS disagrees — and in the tax body’s defense, the two types of travel are fairly distinct from one another.

Think about it: most bosses don’t give you gas money or pay your Uber fare every morning when you arrive at work. That’s just a personal, everyday expense you’ve got to pay to get from place to place. 

Because these expenses fall under the category of personal financial responsibilities, the IRS won’t let you deduct commuting miles.

On the flip side, necessary or ordinary work-related travel (or business miles accrued for work trips) can be written off your tax return.

For example, let’s say you live and work in New York City, but your employer wants to send you to a one-week training course at your company’s sister office in Jersey City. You’d be able to get an Uber to Jersey City from your home and back and deduct the cost. 

That’s because it’s essential for your job, but you’re not traveling from your home to your regular place of work.

You’re also allowed to claim ride-sharing trips if your principal place of business is your home. If your business is registered at your house, any Uber trips you make from your property to go and see your customers or clients are tax-deductible (even though you’re traveling from your house).

Likewise, the same rule applies if you run a business or you’re a contractor without a regular office.

Let’s say you’re a lawyer and you’ve got six clients to visit on a Monday morning. In this case, the IRS would treat your Uber fare from your home to go and meet your first client of the day to be your commute. You wouldn’t be able to claim that fare.

But any trip between your first client and any other clients is deductible travel expenses. You can claim all of those fares on your tax return. As you might have guessed, your ride-sharing fare between your last client and your home isn’t deductible.

How Can You Deduct Uber Rides from Your Taxes? 

Now that we’ve covered what you can deduct, let’s talk about how you can claim ride-sharing expenses on your tax return.

There are three ways you can deduct eligible Uber trips. You can either:

• Deduct the total cost of your Uber fares

• Deduct your Uber rides by the mile

• Itemize deductions on Schedule A

  
  

If you’re deducting the total cost of your Uber fares, it makes record-keeping a lot easier. All you need to do is keep a running total of all your eligible journey costs.

Deducting rides by the mile using the IRS Standard Mileage Rates is a little bit more labor-intensive because you’ve got to differentiate your business miles from your commuting miles.

For example, let’s say your work premises are three miles from your house. But twice a week, you get an Uber from your office to a client that’s 10 miles away.

On your client meeting days, you’ll accumulate 26 miles: three miles to your office, 10 miles to see your client, 10 miles to get back to the office, and then three miles back home.

You can claim back 20 of those miles because they weren’t part of the commute but were necessary for work.

If you’re a taxpayer with a large number of expenses to claim on your tax return, you’ll need to file a Schedule A (Form 1040) alongside your tax return.

By “large amount”, we’re specifically talking about a volume of deductible that exceeds the IRS Standard Deduction cap. As a point of reference, that limit was $13,850 for single filers for the 2023 tax year.

If your total deductions (not just Uber fares) exceed this amount, you’ll need to claim eligible rides via Form 1040 rather than claiming a certain number of miles or tallying up your total fare expenses.

What Records Do You Need to Keep Documenting Your Uber Rides?

No matter how you decide to deduct your Uber rides, it’s important you keep detailed records to back up your claims.

“A benefit of claiming Uber rides is the potential to save money on taxes. However, riders need to ensure that they have kept proper records of their expenses and obtained all necessary receipts to avoid any issues with the IRS should they be audited,” says Dana Ronald, CEO of Tax Crisis Institute.

“Taxpayers should keep receipts, invoices, and bank statements to prove that each ride-share was used for business purposes. They should also document the date and purpose of each trip.”

The IRS will expect you to have a detailed log of the business miles or journey receipts in the same way you’d be expected to keep receipts for hotels, work meals, or other business travel expenses.

Just make sure you’re keeping accurate records of your Uber rides for the whole financial year — and the IRS requires you to keep those records for three years after filing your return.

What’s the Best Way to Keep Records of Work-Related Travel Expenses?

It’s essential that all Uber riders are keeping track of their work-related travel expenses because you have the potential to shave a decent amount of money off your annual tax bill. 

But as the Tax Crisis Institute’s Dana Ronald points out, you must “keep detailed records of each journey with receipts and invoices to ensure you have proof if you are audited”.

“Finally, consult an accountant to ensure your deductions comply with the rules,” she says.

Unfortunately, that can be a lot to keep track of if you’re regularly using ride-sharing services like Uber or Lyft for business travel. That’s where Trustworthy can be a real saver.

Trustworthy is a digital filing cabinet that enables you to keep your receipts, invoices, and records secure, up-to-date, and organized at all times. You’re able to import or scan your receipts and records to make them all totally searchable.

Because it’s cloud-based, you can easily share everything in your organized digital space with your accountant or financial advisor. If you’re engaging a certified public accountant (CPA) to offer bookkeeping services, this frictionless record-sharing will make life a whole lot simpler.

That being said, Trustworthy uses 2-Factor authentication and a 256-bit AES encryption — which means that your records are always safe. That gives you the best of both worlds, and it ensures you’re always organized to make eligible claims wherever possible.

Frequently Asked Questions

Can I Claim Uber as an Expense?

Yes. You can claim Uber as a business expense on your IRS tax return, but only if it’s an ordinary or necessary travel expense.

Can You Deduct Commuting Expenses on Your Tax Return?

No. The IRS classes any expense you accrue traveling from home to your regular place of work as a personal expense. That means you can’t deduct an Uber ride from your apartment to your office.

How Long Do You Need to Keep Travel Records?

The IRS requires you to maintain a record of any travel expenses you claim on your tax return for three years after filing your return. If you claim for a loss, you might need to keep records for up to seven years.