You started driving a few weeks ago. The money arrives with nothing taken out of it, and somewhere behind that is a tax bill nobody has quantified for you. Every guide you find is written for a driver who has been doing this for three years and files quarterly without thinking about it.
Here is the version for someone whose first tax year started in the middle of one — what you owe, when, what you can still fix, and the single decision you make this year that you can never take back.
First: you have almost certainly not missed anything
The estimated-tax deadline on September 15 covered income earned from June through August. If your first delivery was in late August or September, there was nothing for that payment to cover.
Your first estimated payment is the one due January 15, 2027, and it covers everything you earn from September 1 through December 31. That is the date to put in your calendar. Not April — April is when you file, and by then the money is supposed to have already been paid.
The deadline nobody tells first-year drivers about: if you file your return and pay everything by January 31 instead, you can skip the January 15 payment entirely. That is an IRS option specifically for people who can file early — worth knowing if your only income is straightforward.
The decision you cannot undo: standard mileage or actual expenses
This is the part that genuinely matters, and it is decided by what you do on your first return for this car.
There are two ways to deduct a car used for work. Standard mileage multiplies your business miles by a flat IRS rate. Actual expenses adds up gas, insurance, repairs, depreciation and the rest, and deducts the business-use percentage of the total.
The rule that catches people: you have to choose standard mileage in the first year you use that car for business if you ever want the option. Choose it, and you can switch between the two methods in later years as it suits you. Start with actual expenses instead, and standard mileage is closed to you for that vehicle for as long as you own it.
That asymmetry is why most first-year drivers should start with standard mileage: it keeps both doors open. The full comparison is in standard mileage vs actual expenses.
Your rate is 76 cents, not 72.5
2026 had a mid-year rate change, so the year comes in two halves:
| Period | Business rate per mile |
|---|---|
| January 1 – June 30, 2026 | 72.5¢ |
| July 1 – December 31, 2026 | 76¢ |
If your first business mile was in July or later, every mile you have driven is a 76-cent mile. A driver covering 200 business miles a week from September is looking at roughly $5,000 of deduction by New Year — which, for most people, is larger than the entire rest of their Schedule C put together.
What to set aside, starting now
Two separate taxes come out of self-employment income, and the second one surprises everybody:
- Income tax, at whatever rate your total income lands in.
- Self-employment tax — 15.3% covering both halves of Social Security and Medicare, calculated on 92.35% of your net earnings. As an employee, your employer paid half of this and you never saw it. Now you pay all of it.
The working rule most drivers use: set aside 25–30% of your profit, where profit is what is left after the mileage deduction — not 25% of everything the app deposited. Because the mileage deduction is usually large, the difference between those two numbers is substantial, and it is the reason drivers who set aside a share of gross end up over-saving while drivers who set aside nothing end up in trouble.
The arithmetic, with worked examples, is in how much to set aside for taxes on 1099 income.
The penalty question, answered properly
The fear that sends first-year drivers looking for a tax professional in October is usually this one: am I going to be penalized for not paying anything yet?
For a lot of first-year drivers the answer is no, and the reason is the prior-year safe harbor. If you pay in at least 100% of the total tax shown on your previous year's return — 110% if your income is high — you generally avoid the underpayment penalty no matter how much you end up owing this year.
Read that again with your own situation in mind. If last year you had a normal job with tax withheld from every paycheck, and your withholding this year is on track to match last year's total tax, that safe harbor may already be satisfied by withholding you are not even thinking about. The gig income still gets taxed — you will still owe it in April — but the penalty is a separate question with its own test.
If last year's return is genuinely the year you want to measure against, go and look up the total tax line on it. It is the single most useful number in this whole exercise.
If you would rather not owe a lump in April at all: the simplest lever for anyone with a W-2 job alongside the driving is to increase withholding there instead of making estimated payments. Withholding is treated as paid evenly through the year, which is exactly the property that makes it forgiving.
The weeks you have already driven
You almost certainly did not log the first few weeks. Everybody starts driving before they start tracking.
Those miles are still deductible — but a log you rebuild afterwards is weaker evidence than one written as you drove, and the IRS is explicit about wanting records made at or near the time of the trip. Rebuild what you can from what already exists: the delivery app's own trip history, bank timestamps, map history, the photo you took of the odometer when you bought the car. Write down how you reconstructed it, and keep that note with the log.
Then draw a line under it. From today, the log should be contemporaneous. We have a full method for the backfill in how to reconstruct a mileage log after the fact, and what a compliant log has to contain in IRS mileage log requirements.
Where the app fits
TaxMiles exists for the part of this that is pure admin: it detects drives on its own rather than asking you to remember to press start, you classify each one business or personal with a swipe, and it applies the right rate for the date automatically — including the July 1 change, so trips either side of it are calculated correctly without you thinking about it.
It also keeps the number you actually want visible: what to set aside, updated as you drive, with a countdown as an estimated-tax deadline approaches. At tax time there is a CPA-ready export. What it does not do is file for you, or replace a preparer on anything unusual about your situation.
Your first-year checklist
- This week: start tracking every drive, and reconstruct the weeks since you began.
- This month: look up last year's total tax, and decide whether you are paying estimates or raising withholding.
- January 15: estimated payment for September through December, unless you are filing and paying by January 31.
- At filing: choose standard mileage for this car, on this first return, unless you have a specific and considered reason not to.
- Keep: the log, the reconstruction note, and the 1099s. Three years is the usual retention answer — the detail is in how long to keep mileage logs.
None of this is difficult. It is just unfamiliar, and it arrives without an HR department to explain it. Get the log running and the first-year method right, and the rest is arithmetic.
This is general education, not tax advice. Rates and rules verified against IRS guidance on 20 September 2026. Your circumstances decide what you can claim — check with a qualified preparer before filing.