Mileage and gig-tax glossary

Mileage and tracking

Standard mileage rate. A per-mile amount set by the IRS that a taxpayer may use to compute a deductible car expense instead of tracking actual costs. For 2026 the business rate is 72.5 cents per mile for January 1 through June 30 and 76 cents for July 1 through December 31.

Actual expense method. The alternative to the standard mileage rate, in which you deduct the business-use share of your real vehicle costs — fuel, insurance, repairs, depreciation, registration. Requires far more record-keeping and has rules about switching methods.

Business-use percentage. Business miles divided by total miles driven in the year. It is what converts whole-vehicle costs into a deductible amount under the actual expense method, and it is a question you will be asked either way.

Contemporaneous record. A record made at or near the time of the event it describes. The IRS states that a timely-kept record has more value than one written up later, because the facts are fresh — which is why a log written each night beats a reconstruction in April.

Reconstruction. Rebuilding a mileage record after the fact from independent evidence such as platform trip histories, odometer readings, fuel receipts and calendars. Legitimate, weaker than a contemporaneous log, and far better than an estimate.

Trip capture rate. The share of the miles you actually drove that your tracking app recorded. No vendor in the category publishes one. You measure your own by comparing a week of app totals against odometer readings.

Odometer reconciliation. Photographing your odometer at two points in time and comparing the difference against your app's total for the same period. The only independent audit of a mileage app available to a driver.

Geofence. A virtual boundary around a location. Crossing one can wake a suspended app, which is why geofence-based trackers survive operating-system suspension better than continuously polling ones.

Motion activity / activity recognition. Operating-system APIs that report whether a device is stationary, walking, cycling or in a vehicle. Cheap on battery, delivered even to suspended apps, and the basis of reliable automatic trip detection.

Background location. Location access granted while an app is not in the foreground. On iOS this is the "Always" authorisation; on Android it is ACCESS_BACKGROUND_LOCATION. Automatic mileage tracking does not work without it.

Battery optimisation. Operating-system power management that suspends or throttles background apps. On Android it is the single most common cause of a mileage app silently stopping.

Swipe to classify. The interaction pattern, popularised by MileIQ and copied across the category, of swiping a detected trip one way for business and the other for personal.

Back-filled trip start. Extending a detected trip backwards to where the drive actually began, using location history the device already holds, instead of starting the trip at the moment detection became confident. Prevents every trip being short by the detection distance.

Gig work

Dead miles / deadhead. Miles driven without a paying passenger or an active delivery. Common in rideshare for the drive to a pickup and the drive away from a drop-off.

Unpaid miles. Any miles driven while working that the platform does not compensate — to the pickup, repositioning between offers, returning from a delivery zone. Often 30 to 50 percent of a delivery driver's total, and generally deductible business miles even though nobody paid for them.

Repositioning. Driving toward an area with more demand while online and available. Working miles, unpaid.

Multi-apping. Running two or more gig platforms simultaneously to reduce idle time. Raises both earnings and miles, and complicates mileage classification because a single drive may serve two platforms.

Acceptance rate. The share of offered jobs a driver accepts. Platform-specific and, for the driver, mostly relevant to programme tiers rather than to tax.

Effective hourly. A platform's or app's figure for earnings per hour online. Almost always gross — it does not subtract what the car cost to produce it.

True net hourly. Gross earnings minus (all working miles × your cost per mile), divided by hours online. The number that tells you whether a shift was worth doing.

Cost per mile. What one mile actually costs you to drive, all in: fuel or charge, tyres, brakes, oil and servicing, insurance, registration, and depreciation. Personal to your vehicle and usually different from the IRS rate in one direction or the other.

Break-even per mile. The minimum an offer must pay per mile for you to make anything at all. Equal to your cost per mile before tax.

Hotspot. An area a platform indicates has elevated demand. Driving to one while online generates unpaid but generally deductible miles.

Stacked orders. Two or more deliveries accepted together. Improves miles-per-dollar because one drive serves two payouts.

1099-NEC. The information return a platform files reporting non-employee compensation paid to you.

1099-K. The information return reporting payment-card and third-party network transactions, used by some platforms to report driver earnings. Receiving one, or not receiving one, does not change whether income is reportable.

Tax

Schedule C (Form 1040). The form on which a sole proprietor reports business profit or loss. Car and truck expenses go on Line 9, with vehicle details in Part IV.

Self-employment tax. Social Security and Medicare tax paid by the self-employed, 15.3 percent of net earnings from self-employment, of which the employer-equivalent half is deductible above the line.

The $400 threshold. Net earnings from self-employment of $400 or more generally trigger self-employment tax and a filing requirement, whether or not a platform sent you a 1099.

Estimated tax. Quarterly payments of income and self-employment tax made by people whose tax is not withheld. Missing them can produce an underpayment penalty even if the annual return is correct.

Deduction. An amount that reduces taxable income. It is not a refund — a 76-cent deduction reduces your tax by 76 cents multiplied by your effective rate, not by 76 cents. Full explanation.

Marginal rate. The rate applied to your next dollar of income, and therefore the rate at which a deduction saves you income tax.

Commuting. Travel between your home and a regular place of business. Personal, and not deductible. The concept is the most-argued-about boundary in gig mileage because gig drivers do not have a fixed workplace.

Adequate records. The IRS standard for substantiating a car expense: the amount, the time and place, and the business purpose of each trip, supported by a timely-kept record.

Period of limitations. The window during which a return can be examined and records should therefore be retained — generally three years from filing, longer in specific circumstances.

Parking fees and tolls. Business-related parking and tolls are deductible in addition to the standard mileage rate rather than being folded into it. Keep those receipts separately.

Depreciation. The decline in a vehicle's value from use and age. Under the standard mileage rate a depreciation component is built into the rate; under the actual expense method it is claimed separately, with rules that affect what happens when you sell the vehicle.

Section 179 / bonus depreciation. Provisions allowing accelerated write-off of business property in the year placed in service, subject to significant limits for passenger vehicles. Relevant only under the actual expense method and worth professional advice before using.

Above-the-line deduction. A deduction taken in computing adjusted gross income, available whether or not you itemise. The deductible half of self-employment tax is one.