Meal write-offs are a tricky subject. To best understand them, we need to create a small distinction between “contractors” and “drivers.” As a general rule, drivers are considered independent contractors; they’re issued 1099’s and their earnings are subject to self employment taxes. However, for the purposes of this discussion, we need to focus on their similarity with W-2 employees. There are three basic categories to look at:
Let’s focus on the last two criteria:
1) Clients. An Uber driver gets his customers via the Uber app depending on his/her proximity to the user. Minimal work is required. Sure, you can get good reviews which might increase your odds of landing more business, but ultimately they are still Uber’s customers, not yours. In contrast, a hair stylist who works at a hair salon might benefit from occasional walk-ins, but their business primarily comes from their reputation and building a client base over time.
2) Contracts. Driving companies typically have pre-established contracts with fixed hourly rates for every driver. Drivers must agree to background checks, must submit information about their vehicles, and agree to abide by the conditions of the company. They have little-to-no say in the terms of employment. Put simply, drivers are glorified W-2 employees but with more tax headaches (congratulations!).
Soooo… why can’t I write off my snacks exactly?
Glad you asked.
Most self-employed individuals have the flexibility to claim meal write-offs because they meet the last two criteria on the list. They can write-off their lunch with a prospective client, dinner with a business partner, even a coffee so they can work late to meet a deadline. The autonomy of their work means they can cast a wider net for business expenses.
Not so for drivers. Because of the limited nature of their contracts, superfluous expenses (like food) are rarely deductible (you can eat when you’re dead). For example, if a Lyft driver buys a granola bar during a long shift, he can’t write it off on his return. Sounds super unfair, right? Well here’s the thought process: his contract with Lyft does not SPECIFY that he needs to eat, so it’s NOT a requirement for his employment. You remember when I said drivers were glorified W-2 employees? This is the key reason. The company you work for (Uber, Lyft, Doordash, etc), would have to REQUIRE that you eat on the job for it to be a business expense.
Rule of thumb: if eating on the job is NOT a requirement for employment, it is NOT a legitimate business expense.
But drivers, don’t despair! Keeper has a whole page of tax write-offs specifically for you. And every dollar you save in taxes is another dollar you can put towards your coffee budget. Don’t let Uncle Sam keep you from your snack breaks!