# I am confused about the mileage



## Wchambe641 (Feb 22, 2016)

I am new to UBER and have a question about mileage. Specifically, what mileage do I claim? For example, I leave the house and head to a surge area with the hope of getting a rider. I park for a minute then a ride comes through, drive to the pick up location, drive to the destination then complete the ride. Can I claim the mileage from the time I leave the house and then return after doing a couple of rides. Or, can I claim mileage driving from one assignment to another. Thanks


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## Beur (Apr 14, 2015)

In short yes, but best to check with your tax advisor


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## UberTaxPro (Oct 3, 2014)

Wchambe641 said:


> I am new to UBER and have a question about mileage. Specifically, what mileage do I claim? For example, I leave the house and head to a surge area with the hope of getting a rider. I park for a minute then a ride comes through, drive to the pick up location, drive to the destination then complete the ride. Can I claim the mileage from the time I leave the house and then return after doing a couple of rides. Or, can I claim mileage driving from one assignment to another. Thanks


Miles need to be "business mile" to deduct. If your app is on and your accepting pings you've got business miles.


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## Charles Lawson (Mar 4, 2016)

UberTaxPro said:


> Miles need to be "business mile" to deduct. If your app is on and your accepting pings you've got business miles.


This is correct, a mile is a business mile as defined by the IRS that's applied to Uber to mean pretty much any time you are driving around to get a rider, driving to a rider for pickup, and driving the rider to your destination. I drove for Uber last summer to learn about the setup since I have so many clients that drove. Uber reports miles driven but its very low for everyone I do which leads me to believe they only count the miles you have a rider in your car.

One thing you want to avoid is showing a loss on your Schedule-C. That's a major red flag regardless of it being the truth or not. If the IRS audits you they will ask you to produce a physical log to substantiate your claim. The only thing you will have is the Uber summary and they will amend your return to show that figure (unless you kept physical logs or had one of those apps that keeps track on your phone).

Please keep in mind that this in it of itself is an election. If you claim the mileage you cannot claim the gas. The mileage deduction is the IRS's way of reimbursing you for gas AND wear and tear on your vehicle. Most Uber revenue is not taxable for this very reason. The mileage rate is extremely high and Uber's actual payout per mile is pretty close to that number. So do your taxes with someone who knows how to structure the Schedule-C (Any accountant that isn't horrible will suffice).


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## Reversoul (Feb 8, 2016)

U should always start at home. Wait and see if u get a ping before u start wasting gas. If 20 minutes passes and u still get no ping, then start driving towards a more populated area. As far as mileage compensation, make sure u are keeping a daily log just in case u get audited. Personally, I use a spreadsheet. Once I get a ping, I start recording mileage. I'm not sure if the irs allows dead miles.


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## Charles Lawson (Mar 4, 2016)

Reversoul said:


> U should always start at home. Wait and see if u get a ping before u start wasting gas. If 20 minutes passes and u still get no ping, then start driving towards a more populated area. As far as mileage compensation, make sure u are keeping a daily log just in case u get audited. Personally, I use a spreadsheet. Once I get a ping, I start recording mileage. I'm not sure if the irs allows dead miles.


They allow what you call dead miles but they must be substantiated. If you hold yourself out as a business losing money they may audit you. Uber is drastically increasing the amount of Schedule-C's so maybe they will audit less. This is just speculation on my part though.


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## Reversoul (Feb 8, 2016)

Charles Lawson said:


> They allow what you call dead miles but they must be substantiated. If you hold yourself out as a business losing money they may audit you. Uber is drastically increasing the amount of Schedule-C's so maybe they will audit less. This is just speculation on my part though.


I hope so. It would be nice to be compensated for the miles I drive after dropping a pax at the airport. We're not allowed to do airport pick ups so I lose money driving back to my home area.


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## Charles Lawson (Mar 4, 2016)

="Reversoul, post: 891489, member: 45013"]I hope so. It would be nice to be compensated for the miles I drive after dropping a pax at the airport. We're not allowed to do airport pick ups so I lose money driving back to my home area.[/QUOTE]

No need to hope, this is a fact. Sorry I don't want other people reading this to doubt the situation. I've personally come into contact with IRS auditors and substantiated miles exactly like this. One thing to note, you aren't really being compensated for the miles in a traditional sense, but rather a convoluted way. All they are doing here is using a business mile driven as a basis to allow you to make less of your revenue taxable.

For example, reducing your taxable revenue by a dollar doesn't save you a dollar, but rather it saves you $1 multiplied by your effective tax rate which will always be less than the dollar. You probably spent more than whatever amount this is on your vehicle between gas and asset depreciation from use.

I hope that all makes sense! There are a few people on this forum disseminating false tax information(including site moderators) so be careful. I'm an accountant in a CPA firm.


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## UberTaxPro (Oct 3, 2014)

Thanks for clarifying that "reimbursing" issue. It is in no way a reimbursement. It's a business tax deduction nothing more or less.


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## UberTaxPro (Oct 3, 2014)

Charles Lawson It's nice to have more people on here that actually know what they're talking about. I do have a couple of issues with your posts so far so I'm just gonna nip it in the bud. I'm glad you corrected that "reimbursing issue". I've seen many people on here make the mistake you did calling that "compensation" which couldn't be further from the truth!
As a tax adviser I'm sure you're aware circular 230 prohibits advising people from playing the "lottery game" (adjusting tax returns to avoid audits) . A couple of quotes from you below would seem dangerously close to advising someone to play the "lottery game" with their tax returns.
_ "If you hold yourself out as a business losing money they may audit you. Uber is drastically increasing the amount of Schedule-C's so maybe they will audit less."
"One thing you want to avoid is showing a loss on your Schedule-C. That's a major red flag regardless of it being the truth or not."_
I wouldn't be bringing this up if you didn't claim to be an accountant working in a CPA's office. Why would a tax adviser ever suggest a business hold themselves out to be profitable on their schedule C when in truth they had a loss? If you have a loss why on earth would you not want to use the deduction to offset other income or carry it to another year? Why should a taxpayer be afraid of an audit if all tax information is truthful and all records have been maintained?
FYI: https://www.irs.gov/pub/irs-utl/Circular_230_Revisions_Prohibit_Playing_Audit Lottery_With_Clients.pdf


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## StarzykCPA (Aug 6, 2015)

UberTaxPro said:


> Charles Lawson It's nice to have more people on here that actually know what they're talking about. I do have a couple of issues with your posts so far so I'm just gonna nip it in the bud. I'm glad you corrected that "reimbursing issue". I've seen many people on here make the mistake you did calling that "compensation" which couldn't be further from the truth!
> As a tax adviser I'm sure you're aware circular 230 prohibits advising people from playing the "lottery game" (adjusting tax returns to avoid audits) . A couple of quotes from you below would seem dangerously close to advising someone to play the "lottery game" with their tax returns.
> * "If you hold yourself out as a business losing money they may audit you. Uber is drastically increasing the amount of Schedule-C's so maybe they will audit less."
> "One thing you want to avoid is showing a loss on your Schedule-C. That's a major red flag regardless of it being the truth or not."*
> ...


Yes, indeed, careful fellow CPA! This is all sound advice.


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