# Still Owe Taxes After Mileage Deduction



## tryingforthat5star (Mar 12, 2017)

This situation came up last year and again now this year. Basically I did $21K Net after all of Uber deductions and I had 18,000 miles online off just by there mileage log. So let me see if someone can figure this out real quick between both jobs and there not exact but there close.

Uber - $21K Net Profit
15% Taxes $3150
Mileage Deduction $9720

Full time W2 Job $50K Net

If I don't file Uber I have around a $1400 tax return owed to me from my W2 full time job but as soon as I put Uber into the mix I now owe $2300 in taxes to the IRS? I thought the $9720 mileage write off would basically wipe out any tax liability owed doing Uber leaving me with just a regular return from my W2 or less of a return since it's one big income for the year. Feel free to chime in.


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## Skinny1 (Sep 24, 2015)

That’s the thing when you show profit... it makes the gig even more not worth it for some unless you can shield the income... retirement account etc. all net profit is taxed at the incremental rate on top of your $50k.

Where do you get your 15% tax number above? That’s just the self employment piece. Now you have federal on the net profit also.


I basically have to put all net profit into a retirement account I qualify for since I don’t have a regular job.... or else I’d stop doing this.


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## Older Chauffeur (Oct 16, 2014)

tryingforthat5star said:


> This situation came up last year and again now this year. Basically I did $21K Net after all of Uber deductions and I had 18,000 miles online off just by there mileage log. So let me see if someone can figure this out real quick between both jobs and there not exact but there close.
> 
> Uber - $21K Net Profit
> 15% Taxes $3150
> ...


Not enough information, to answer your main question. But if I understand what you have provided, the $21k is your gross, not net profit. The mileage (apparently you don't keep a mileage log including dead miles) is deducted from your gross before figuring your 15.3% contributions to Social Security and Medicare. You may have other deductions such as your cellphone. Dead miles would probably bring you down to nominal net profit, if you're like many drivers who post here, who report more dead than paid miles by a large margin.

There is also a one-time 20% deduction for business owners if you qualify.

Just FYI, you file a tax "return" and may receive a "refund" if you have overpaid through withholding.

Are you using a tax program such as Turbo Tax? Maybe you should consider going to a tax professional (which I am not) this year.

Good luck.


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## tryingforthat5star (Mar 12, 2017)

Skinny1 said:


> That's the thing when you show profit... it makes the gig even more not worth it for some unless you can shield the income... retirement account etc. all net profit is taxed at the incremental rate on top of your $50k.
> 
> Where do you get your 15% tax number above? That's just the self employment piece. Now you have federal on the net profit also.
> 
> I basically have to put all net profit into a retirement account I qualify for since I don't have a regular job.... or else I'd stop doing this.


We might be onto something then. 15% self employment tax at 21K net would put us around that $3150 area of taxes owed. So your saying there is also Federal on top of that also because I'm combining income between both jobs or just in general you always owe both taxes even if you do Uber solo.


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## dirtylee (Sep 2, 2015)

Did you include your dead miles? I haven't looked at mine yet but I think it only shows miles on trip.
no i don't log anything, i just adjust the figures to make it work. the irs won't audit you over uber income. You other job otoh will put you above the threshold for a 2nd look.


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## Older Chauffeur (Oct 16, 2014)

18000 miles x .545 = $9810

$21,000- 9810 = $11,190 x 15.3% = $1712

Half of the $1712 goes on your 1040 to reduce your total tax.


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## Skinny1 (Sep 24, 2015)

tryingforthat5star said:


> We might be onto something then. 15% self employment tax at 21K net would put us around that $3150 area of taxes owed. So your saying there is also Federal on top of that also because I'm combining income between both jobs or just in general you always owe both taxes even if you do Uber solo.


Yes self employment + federal.... so 15% + 20%+ (whatever your top incremental rate is) roughly for your estimate.

See that's 35c at the least of every profit dollar.


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## Uberbrent (Mar 22, 2016)

If what the Op says is true, he will also owe a penalty for not filing quarterly.


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## DexNex (Apr 18, 2015)

Uberbrent said:


> If what the Op says is true, he will also owe a penalty for not filing quarterly.


No he doesn't. His main income is from his full-time work.



tryingforthat5star said:


> This situation came up last year and again now this year. Basically I did $21K Net after all of Uber deductions and I had 18,000 miles online off just by there mileage log. So let me see if someone can figure this out real quick between both jobs and there not exact but there close.
> 
> Uber - $21K Net Profit
> 15% Taxes $3150
> ...


income bracket bump?


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## tryingforthat5star (Mar 12, 2017)

Appreciate the response helped shined some light on it. As of now it sounds legit between both jobs, mileage, taxes etc.. just have to wait to file till around March then I'll make one lump sump to the IRS on what is owed that will give me enough time.


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## dauction (Sep 26, 2017)

tryingforthat5star said:


> This situation came up last year and again now this year. Basically I did $21K Net after all of Uber deductions and I had 18,000 miles online off just by there mileage log. So let me see if someone can figure this out real quick between both jobs and there not exact but there close.
> 
> Uber - $21K Net Profit
> 15% Taxes $3150
> ...


Morning...
*You are at 22% NOT 15% 
22% Individual =38,701 to $82,500 Married=$77,401 to $165,000 
*
Also Taxes are calculated separately..


> Uber - $21K Net Profit
> 15% Taxes $3150


Your net between both Jobs is roughly 71K ....about the same as I have ... I ended up with about $1,800 refund ... (would have been 3K with just job as I contribute money to all the tax shelters available ..Minnesota deferred (like a 401K) Flexible spending account , Health Savings Account .

Make sure you continue to find ALL the write offs/deductions you can ..and this year push your Mileage Higher .. your DEAD end miles.. I run Uber/lyft 60 miles on Saturdays to Minneapolis from St Cloud and Back Home again ..so that's an extra 120 Miles a week (6,000 a year )...Sometimes I catch rides on the way to and fro sometimes not but absolutely Stay online UBer any miles you think may be dead end


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## tryingforthat5star (Mar 12, 2017)

The majority it most likely has to do with using 0 for my main W2 job all year long so if I had went to 1 maybe even 2 that would have ate into the taxes owed since more was taken out from the primary full time job to cover anything Uber added into the mix.


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## FLKeys (Dec 27, 2018)

tryingforthat5star said:


> The majority it most likely has to do with using 0 for my main W2 job all year long so if I had went to 1 maybe even 2 that would have ate into the taxes owed since more was taken out from the primary full time job to cover anything Uber added into the mix.


Not sure I am reading the quote above correctly. If you have a W-2 Job claiming Single and 0 dependents takes out the most in taxes. Adding dependents to you withholding status with your employer will decrease the amount of taxes withheld from your check. If you have multiple W-2 jobs it gets more complicated as each employer is only taxing you at what our expected annual income is with them. If you add these up it could put you in a higher tax bracket and then not enough taxes are being withheld.

Along with my mileage logs I keep ongoing income and expense logs. I know at any given time what my net profit is and what my tax liability is. I love Excel spread sheets.


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## tryingforthat5star (Mar 12, 2017)

Sorry it's the other way around I was claiming 1 at my full time W2 job so if I claimed yes 0 that would have taken more out and set the amount owed I would assume a lot lower. Once I get a goods solid dead miles into the equation I'll update this post right now I increased my dead miles to see where I stood and I'm down to around $1300 owed from $2300


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## Boca Ratman (Jun 6, 2018)

Just increase your mileage to 36k


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

tryingforthat5star said:


> This situation came up last year and again now this year. Basically I did $21K Net after all of Uber deductions and I had 18,000 miles online off just by there mileage log. So let me see if someone can figure this out real quick between both jobs and there not exact but there close.
> 
> Uber - $21K Net Profit
> 15% Taxes $3150
> ...


$50,000 in your W2 job brings you up a notch on the tax bracket. Personal deductions are getting chewed up on income earned from your other job. IE the 6,500 you get tax free was already used up by your day job.

You also Seem to be in a profitable market. As in you are legit turning a profit on paper, most markets in the US are very very not profitible by IRS standards.

How much you owe to the IRS over uber/lyft driving is impacted by what market your in more than it's effected by how much you actually make.

Not even joking there, as crazy as that is to think about.

Based on what i'm seeing.... with *$10,000* in _*profit*_ your probably going to end up owing a few grand.

Now if you had $20,000 in revenue in orlando you probably wouldn't.



Boca Ratman said:


> Just increase your mileage to 36k


I would only do that if you can fabricate a mileage log.


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## Skinny1 (Sep 24, 2015)

No reason to lie .... the verdict is in on this gig

If you have other income and show net profits on this (you’d be an idiot to drive for a loss year in and year out) then this is not a great deal. All the profit is taxed at the incremental income rate (the highest rate on your w2 income)

Do the math on what you earned after paying 35%+ of profit to Uncle Sam... it’s a loser period if you can’t shield.


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## JoshInReno (Jan 29, 2018)

Skinny1 said:


> No reason to lie .... the verdict is in on this gig
> 
> If you have other income and show net profits on this (you'd be an idiot to drive for a loss year in and year out) then this is not a great deal. All the profit is taxed at the incremental income rate (the highest rate on your w2 income)
> 
> Do the math on what you earned after paying 35%+ of profit to Uncle Sam... it's a loser period if you can't shield.


I'm afraid this is where I'm at. Just finished doing my taxes after my first year of driving and to say it was eye opening is an understatement. I apparently make too much money to have a side business of driving and am taking it in the shorts. Even with all of my well documented miles I still am taking a big hit.

Which is really disappointing - I liked being able to generate income on the weekends. But not at the tax rate that I'm looking at. Success is now punished.

The juice is not worth the squeeze here.


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## UberTaxPro (Oct 3, 2014)

JoshInReno said:


> I'm afraid this is where I'm at. Just finished doing my taxes after my first year of driving and to say it was eye opening is an understatement. I apparently make too much money to have a side business of driving and am taking it in the shorts. Even with all of my well documented miles I still am taking a big hit.
> 
> Which is really disappointing - I liked being able to generate income on the weekends. But not at the tax rate that I'm looking at. Success is now punished.
> 
> The juice is not worth the squeeze here.


The worst is if your ride-share profit puts you in a higher bracket


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## islanddriver (Apr 6, 2018)

That's why Uber and lyft are just for people who are retired


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## UberTaxPro (Oct 3, 2014)

islanddriver said:


> That's why Uber and lyft are just for people who are retired


ride-share profits could turn social security into taxable income.


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## Chibry (Oct 5, 2018)

UberTaxPro said:


> The worst is if your ride-share profit puts you in a higher bracket


it doesn't matter if you get upped a bracket, you only get charged more on the income in that bracket


JoshInReno said:


> I'm afraid this is where I'm at. Just finished doing my taxes after my first year of driving and to say it was eye opening is an understatement. I apparently make too much money to have a side business of driving and am taking it in the shorts. Even with all of my well documented miles I still am taking a big hit.
> 
> Which is really disappointing - I liked being able to generate income on the weekends. But not at the tax rate that I'm looking at. Success is now punished.
> 
> The juice is not worth the squeeze here.


The bright side is that 15% Social Security/Medicare tax you are paying eventually comes back to you if you live long enought to get social security.


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## UberTaxPro (Oct 3, 2014)

Chibry said:


> it doesn't matter if you get upped a bracket, you only get charged more on the income in that bracket
> 
> The bright side is that 15% Social Security/Medicare tax you are paying eventually comes back to you if you live long enought to get social security.


I'd rather have the 15% to invest on my own! hopefully social security lives long enough to be there when we all reach 65 or whatever age they move it up to.


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## AuxCordBoston (Dec 3, 2016)

tryingforthat5star said:


> This situation came up last year and again now this year. Basically I did $21K Net after all of Uber deductions and I had 18,000 miles online off just by there mileage log. So let me see if someone can figure this out real quick between both jobs and there not exact but there close.
> 
> Uber - $21K Net Profit
> 15% Taxes $3150
> ...


Increase the miles you put on your return. Lol


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## peteyvavs (Nov 18, 2015)

tryingforthat5star said:


> This situation came up last year and again now this year. Basically I did $21K Net after all of Uber deductions and I had 18,000 miles online off just by there mileage log. So let me see if someone can figure this out real quick between both jobs and there not exact but there close.
> 
> Uber - $21K Net Profit
> 15% Taxes $3150
> ...


First did you include the dead miles you drove after you dropped pax off, you probably didn't from your statement. Uber will include the actual mileage when you had a pax only, you should have deducted 36k miles.


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## UberTaxPro (Oct 3, 2014)

peteyvavs said:


> First did you include the dead miles you drove after you dropped pax off, you probably didn't from your statement. Uber will include the actual mileage when you had a pax only, you should have deducted 36k miles.


Wow! Turning a 21K profit is very unusual! Either you must be an Uber Guru or your're missing out on mileage by not having your own mileage log like @peteyvavs :rollseyes: says above. I'd spend some more time working on that return if I were you!


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## Rockocubs (Jul 31, 2017)

Something is very wrong with something or all of your pickups are less than a mile


peteyvavs said:


> First did you include the dead miles you drove after you dropped pax off, you probably didn't from your statement. Uber will include the actual mileage when you had a pax only, you should have deducted 36k miles.


Uber and lyft have both included online miles the last two years at least they did for me.


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## FLKeys (Dec 27, 2018)

My report says online miles, who knows what they call online miles, I don't want to trust that report I trust my mileage log.


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## Ssgcraig (Jul 8, 2015)

Is there an assumption that you would not be paying taxes on the income from Uber?


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## peteyvavs (Nov 18, 2015)

Uber/Lyft only keeps track of mileage from pick up to drop off off pax, you have to be aware of the daily mileage driven from the time you put the app on until you close the app. All the miles you drive are tax deductible.


Chibry said:


> it doesn't matter if you get upped a bracket, you only get charged more on the income in that bracket
> 
> The bright side is that 15% Social Security/Medicare tax you are paying eventually comes back to you if you live long enought to get social security.


You'll have to live till 300 to achieve that return.


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## Launchpad McQuack (Jan 8, 2019)

Chibry said:


> The bright side is that 15% Social Security/Medicare tax you are paying eventually comes back to you if you live long enought to get social security.


You think that they're still going to be paying out Social Security by the time that I'm old enough to collect it? You're a lot more optimistic than I am. I suspect that that Ponzi scheme will have long since collapsed by then.


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## BobMarley (Feb 12, 2019)

Launchpad McQuack said:


> You think that they're still going to be paying out Social Security by the time that I'm old enough to collect it? You're a lot more optimistic than I am. I suspect that that Ponzi scheme will have long since collapsed by then.


Yes. Here is why: people nearing retirement vote. I fully expect Congress to pass a law that says something like people born after 1985 get 30% less benefits. 20 years later when millennials are near retirement one party is going to run on: "we'll give you your benefits back!". And they will win.


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