I started renting my 2020 Camry to rideshare drivers on RideshareRenter in early 2024. The car was sitting in my driveway five days a week while I worked from home, pulling down roughly $1,450 a month in passive income from drivers using it for Uber and Lyft. The income was nice. What surprised me was how much of it I got to keep after tax deductions.
If you're listing a vehicle on RideshareRenter or thinking about it, here's what I learned about deductions through two tax seasons, a CPA conversation that cost me $375, and a lot of receipts.
Quick disclaimer up front: I'm not a CPA. Talk to a tax professional about your specific situation. This is what I've actually deducted and what my accountant told me was reasonable, but the IRS rules change and your state may treat rental income differently.
The income you earn renting your car on RideshareRenter is generally reported on Schedule C (business income) or Schedule E (rental income), depending on how active you are in the business. Most owners I've talked to use Schedule C because there's a level of service involved — coordinating with drivers, maintaining the vehicle, managing the listing. A passive listing where you do almost nothing might end up on Schedule E.
This distinction matters because Schedule C allows you to deduct against self-employment tax, while Schedule E doesn't, but you also pay self-employment tax on Schedule C income. The right choice depends on the rest of your tax picture. My CPA put me on Schedule C and I've been there ever since.
The big one. A $24,000 used Camry can typically be depreciated over a five-year period, which means you might be able to deduct $4,800 a year on paper without actually spending the money. There are caps (the IRS limits luxury vehicle depreciation), and bonus depreciation rules have been changing year to year, but on a standard sedan you're getting real value here.
I claimed Section 179 in my first year and pulled forward a big chunk of depreciation in year one. Talk to your CPA about whether that or straight-line works better for your situation.
Driving to meet a renter? Driving the car to get the oil changed? Driving to a detailer? Those miles count as business mileage. At the 2026 standard mileage rate (currently $0.70 per mile), 500 miles a year is $350 in deductions for very little effort. Keep a log.
Note: this is YOUR miles for managing the rental, not the renter's miles. Renter miles aren't your deduction.
Every oil change, tire rotation, brake job, alignment, battery replacement, and detail counts. I keep every receipt in a folder labeled by month. In year one I had $1,840 in legitimate maintenance expenses. All of it deducted.
This includes:
The insurance you carry on the vehicle for non-rental use is deductible against rental income on a pro-rated basis. If your car is rented 70% of the year and personally used 30%, 70% of your insurance premiums are deductible. Same logic applies to your registration and any vehicle taxes.
The protection plan portion that RideshareRenter includes during active rentals is generally already netted out of your payouts, so you don't deduct that again.
Floor mats, seat covers, car wash supplies, interior detail products, phone mounts you provide for renters, sanitizing wipes — all deductible. It's small money individually. I added up about $310 last year across receipts.
If you're financing the car you're renting out, the interest portion of your monthly loan payment is deductible against rental income on the same business-use percentage basis. The principal isn't deductible (you're paying down an asset), but the interest is.
RideshareRenter takes a service fee from each rental. That fee is already excluded from your payout, so it's not a deduction you take separately — your reported income should already be the net amount. Check your RideshareRenter year-end statement against your bank deposits to make sure they match.
If you have a dedicated workspace where you manage listings, communicate with renters, and handle paperwork, you may qualify for a home office deduction. The bar is high — IRS wants the space used regularly and exclusively for the business. Don't claim a kitchen table.
A few things I see new owners get wrong:
Renter's gas. The driver pays for their own fuel. That's not your expense.
Personal use mileage. If you drive the car to the grocery store on a weekend you're not renting it out, those miles are personal. Keep them separate.
Speeding tickets and traffic fines. Not deductible. Doesn't matter who got the ticket.
The full cost of a new car bought specifically for rental. You depreciate it over the IRS schedule, not all at once (unless Section 179 and bonus depreciation specifically apply in the year of purchase, which depends on the year and the vehicle weight class).
| Item | Amount |
|---|---|
| Gross rental income (RideshareRenter payouts) | $17,820 |
| Depreciation (year 2 straight-line) | -$4,800 |
| Maintenance and repairs | -$2,140 |
| Insurance (business-use portion) | -$1,560 |
| Registration + property tax (pro-rated) | -$285 |
| Cleaning, supplies, accessories | -$295 |
| Loan interest (pro-rated) | -$720 |
| Personal mileage for the business | -$385 |
| Net taxable rental income | $7,635 |
Roughly $17,800 in cash hit my bank, and after legitimate deductions I owed tax on about $7,600 of it. That's a real difference. The depreciation alone made a five-figure income feel like it was barely taxable.
The IRS wants documentation. Don't be the owner who gets audited and can't prove anything. My system after two seasons:
The whole thing takes me about 90 minutes a quarter to update. Way less painful than scrambling in April.
You don't have to form an LLC to start, but many owners do for liability reasons. The income is reportable either way. Talk to your CPA about whether an LLC, sole proprietorship, or S-Corp election makes sense for your situation. For most single-car owners, sole proprietorship reported on Schedule C is the starting point.
If your gross payouts exceed the IRS reporting threshold, you'll typically receive a 1099-K or similar form. The threshold has been changing — for 2026 the federal reporting threshold is set at $5,000 in payments. Even below the threshold, you're still required to report the income.
Yes, but you depreciate the cost over the IRS-allowed schedule rather than expensing it all at once. Section 179 and bonus depreciation rules can let you accelerate this. The car has to actually be used primarily for the rental business to qualify for the largest deductions.
You can still deduct rental-related expenses, but they're pro-rated based on the percentage of business use. If your car is rented 75% of the year and you drive it personally 25%, most expenses get a 75% deduction. Keep a clean mileage log so you can prove the split.
The fees are typically already netted out of your payouts before they hit your bank account. Your reported gross income should already reflect the net of those fees, so you don't double-deduct them. Confirm by matching your RideshareRenter statements to your bank deposits.
RideshareRenter's protection plan and the driver's coverage handle the claim during an active rental. The proceeds you receive are generally treated as a property settlement and you may owe tax on any gain above your depreciated basis. This is one of the places where a CPA pays for themselves — the rules are tricky.
Renting your car on RideshareRenter generates real income, and the tax code recognizes that running a vehicle as a business comes with real costs. Track everything, depreciate aggressively where the rules allow, and use a CPA your first year. The tax savings on a single rental vehicle can easily cover the CPA fee five times over.
Vehicle owners: List your car on RideshareRenter and start tracking expenses from day one — every receipt counts.
Drivers: Looking for a vehicle? Browse cars listed by owners who maintain them well and respond fast on RideshareRenter.
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