What Can a Self-Employed Taxi Driver Deduct from His Taxes?

by Kevin Johnston

As a taxi driver, you are considered self-employed if you set your own hours and no one supervises how you do your job. Even if you rent your cab from a fleet and use a dispatcher, you are considered an independent contractor. You will need to take every possible deduction on your taxes to lower your tax bill. Know what deductions are available to you as a taxi driver.

Rent or Lease Payments

The money you pay as a taxi driver to rent your taxi from a fleet is tax deductible. Keep track of what the fleet company charges you for your taxi each day. Total up your expenditures for renting or leasing your cab at the end of the year.


Your insurance expense should not include health insurance, but if you have to pay insurance for your taxi, you can deduct it. This payment may be hidden in your payments to the fleet company for renting the vehicle. Find out how much of your payments to the company cover insurance.


You can deduct the cost of any supplies you use in your taxi service. If you have special forms or equipment you use in your cab, these are business expenses. Deduct them and keep receipts to back up your claim.


Any fees you pay to drive a taxi are deductible. This may include not only your taxi license but any extra charges you pay to have a special driver's license. Licenses are a form of tax that you pay, and you may deduct these payments.

Credit Card Processing Fees

Many taxis accept credit cards now. The companies that process credit cards charge a transaction fee, which comes out of your earnings. You can deduct all transaction fees for credit cards from your taxes.


If you are a member of a trade organization, union or association related to driving a taxi, you can deduct the expense of membership. Write off any membership dues, union dues or association fees from your taxes.

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