# Tax deductions



## Ladyleo78 (Mar 20, 2018)

Is it a requirement to write off Uber/Lyft operational costs such as service and instant pay fees? I am reporting my gross earnings, but I also have dependents in which I qualify for EIC and child tax credit. I think this changes my tax situation where i don't have to worry about write offs considering earnings. However, I wrote off mileage b/c I didn't pay taxes last year. I just noticed my refund amount is higher without writing off the fees. UberTaxPro


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## UberTaxPro (Oct 3, 2014)

Ladyleo78 said:


> Is it a requirement to write off Uber/Lyft operational costs such as service and instant pay fees? I am reporting my gross earnings, but I also have dependents in which I qualify for EIC and child tax credit. I think this changes my tax situation where i don't have to worry about write offs considering earnings. However, I wrote off mileage b/c I didn't pay taxes last year. I just noticed my refund amount is higher without writing off the fees. UberTaxPro


Wow! Great question and very observant of you! You *have* to include the deductions when you're dealing with the EIC. There is an IRS Revenue Ruling about this exact issue... https://www.irs.gov/pub/irs-wd/0022051.pdf
Be very careful with the EIC. The penalties for misusing it are unbelievably severe. You don't want to go there!


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## UberTaxPro (Oct 3, 2014)

Can't stop thinking about this...suppose you qualify for the EIC and the credit goes up with less expenses like Ladyleo78 above. You're all ready to file your taxes including all business deductions to be in complience with the Revenue Ruling above. When you go to get your mileage log you find out that your dog has eaten half of it and destroyed the rest beyond recognition. Now the IRS doesn't want you taking the SMR deduction without written evidence (mileage log). They even make you check a box on your return to verify you have written evidence. But on the other hand, they don't want you artificially cranking up your EIC credit. What do you do? Follow the no log no deduction rule? If you do you're cranking up your EIC deduction and putting yourself in jeopardy of those horrendous penalties. If you throw some miles in there to keep your EIC down you're breaking the mileage log rules. 
Either way you're not in complience! Hmmm... maybe there's a tax court case about this.


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## Ladyleo78 (Mar 20, 2018)

Well, before I read your last reply this is the question I was working on. I think you somewhat touched on what I was getting at? UberTaxPro

Thanks a lot. I appreciate that you can back up what you say by referencing information. Additionally, I didn't accurately track mileage, but I have a estimate on what my beginning and ending mileage were. I took that in consideration when preparing my taxes before noticing adding deductions were lowering the refund amount. With that being said, would it be safe or better to just use the miles provided by Uber/Lyft as they are more accurate? I figure I could reduce the mileage down to this number and add the operational costs back in as the refund amount should increase rather than decrease when deductions are taken right?

I was just thinking to claim the minimum mileage and only claim obvious expenses such as mile deduction and operational costs. I figure less I claim, less proof/documentation I need as well.



UberTaxPro said:


> Can't stop thinking about this...suppose you qualify for the EIC and the credit goes up with less expenses like Ladyleo78 above. You're all ready to file your taxes including all business deductions to be in complience with the Revenue Ruling above. When you go to get your mileage log you find out that your dog has eaten half of it and destroyed the rest beyond recognition. Now the IRS doesn't want you taking the SMR deduction without written evidence (mileage log). They even make you check a box on your return to verify you have written evidence. But on the other hand, they don't want you artificially cranking up your EIC credit. What do you do? Follow the no log no deduction rule? If you do you're cranking up your EIC deduction and putting yourself in jeopardy of those horrendous penalties. If you throw some miles in there to keep your EIC down you're breaking the mileage log rules.
> Either way you're not in complience! Hmmm... maybe there's a tax court case about this.


It sounds like I'm damned if I do, and damned if I don't!...lol But from what you've said here. If I just went with the mileage Uber and Lyft has documented, then that can be considered written evidence, right? Or are we required to have some sort of log in addition to the mileage Uber/Lyft provides?


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## Stevie The magic Unicorn (Apr 3, 2018)

This has been known to happen,

However instead of removing expenses there is a far easier and far less nebulous method of increasing your income to increase your EIC benefits.

Or you can add some cash tips/ revenue in "other income" and tinker with it to receive your EIC.

The IRS will have no possible way to disprove additional cash revenue and it is not something the IRS thinks twice when they see. Who in their right mind adds more income to their return that's fake?

Fake a week to week log with numbers for your cash tips and keep it with your other tax documents.

It won't be anything that is supported or refuted by anything the IRS can find. There are no documents generated, there's no bank records to search. And if the IRS asks where it goes? Where was it deposited?

I spend it on _blank_ and don't keep receipts cause i paid cash...
People do pay for things with cash and it's a lot easier to buy groceries from walmart at 3:00 am with the cash you just mad then to wait until the bank opens to deposit cash and....

Ethical?
Splitting hairs...

safe?
Very

I know a LOT of taxi drivers that have shaved tens of thousands of cash revenue and been audited and came out just fine... Adding some cash won't be hard.

Other drivers increased their cash income to boost their credit worthiness..

I mean... who in their right mind adds income?
I mean that's not the first thing i look at if i was the IRS agent, in fact it's the last cause I wouldn't know how to begin disproving it.

Normally the IRS is going after fake deductions and hidden income. Fabricated income?


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