Tracking Mileage and Expenses for Taxes: A Simple System for Chicago Drivers

If you drive for rideshare, delivery or as an independent taxi or livery operator, you're almost certainly self-employed in the eyes of the IRS. That means your vehicle costs can lower your tax bill — but only if you actually track them. Here's a simple system that works.

Two ways to deduct vehicle costs

The IRS gives you two options, and you pick one per vehicle each year:

• Standard mileage rate — you track business miles driven and multiply by a per-mile rate the IRS sets. For 2026, that rate started at 72.5 cents per mile and was raised mid-year to 76 cents per mile for miles driven on or after July 1.

• Actual expense method — you track and deduct your actual costs (gas, maintenance, insurance, depreciation, etc.) based on the percentage of driving that was for business.

Most rideshare, delivery and taxi drivers use the standard mileage method because it's simpler to track. But actual expenses can be worth more if your vehicle costs are high. A tax professional can help you figure out which is better for your situation.

What to actually track

Whichever method you use, keep a record of:

• Every business trip's mileage — starting odometer, ending odometer, or at minimum total miles for the day

• Date and purpose of each trip or driving session

• Receipts for gas, maintenance, car washes, tolls, phone mount, dash cam, and anything else used for the work

• Parking and toll costs incurred while working

The IRS wants contemporaneous records — meaning logged close to when the trip happened, not reconstructed months later from memory.

Make it a daily habit, not a year-end scramble

The easiest way to lose deductions is to wait until tax season and try to remember a year of driving. A five-second habit — logging mileage and any expense right after it happens — beats trying to reconstruct twelve months of driving in April.

This is exactly what the Maintenance Log and Expense Tracker tools on ChicagoDrivers.com (opens in a new tab) are built for: log a trip, a fill-up or a repair the moment it happens, tagged to the right vehicle, so by tax time your whole year is already organized instead of scattered across paper receipts and bank statements.

The bottom line

You don't need complicated bookkeeping to protect your deductions — you need consistency. Track every mile and every receipt as it happens, pick a deduction method with a tax professional, and let the software do the math instead of doing it from memory in April.

This post is for general information only and isn't tax advice. Talk to a qualified tax professional about your specific situation.