# Why is there such a large discrepancy between 1099 and actual income?



## Sorien (Oct 15, 2017)

My 1099-MISC has about 1/3 of the actual income I made from Uber last year. Why is that?

n/m I figured it out. Just took a bit more digging.


----------



## tohunt4me (Nov 23, 2015)

Uber LIES


----------



## Pax Collector (Feb 18, 2018)

What did you figure out? It might be educational for others with the same question.


----------



## Uber's Guber (Oct 22, 2017)

Sorien said:


> My 1099-MISC has about 1/3 of the actual income I made from Uber last year.


Maybe only 1/3, but at least you earned income! This calls for celebration!


----------



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

don't confuse income with revenue...

your 1099 MISC has your revenue on it, then you subtract your expenses and you get your taxable income, of which don't expect it to be positive


----------



## oldfart (Dec 22, 2017)

Stevie The magic Unicorn said:


> don't confuse income with revenue...
> 
> your 1099 MISC has your revenue on it, then you subtract your expenses and you get your taxable income, of which don't expect it to be positive


No
your 1099 misc does not have your rideshare income (income from giving rides) on it.

And the 1099k includes all the money your passengers paid, befor Uber took their fees

I haven't picked this apart yet but I think the top line number on the summary and the 1099k ought to agree. This number goes on your schedule C. The summary gives you a total of fees paid to Uber so these would be listed as expenses on schedule C. Then deduct your other expenses (mileage for example) to get to net income (or loss).


----------



## Lawlet91 (Jun 8, 2017)

No, the amount charged to Uber is by the law money you earned, which you are required to claim, what you earned is irrelevant in the eyes of the IRS because you are taxed based on the total cost of rides, Uber is not


----------



## oldfart (Dec 22, 2017)

Lawlet91 said:


> No, the amount charged to Uber is by the law money you earned, which you are required to claim, what you earned is irrelevant in the eyes of the IRS because you are taxed based on the total cost of rides, Uber is not


I don't understand what you mean when you say "the amount charged to Uber" and I don't know what you mean when you say "what you earned is irrelevant"

And we are not taxed on the total cost of rides. We are taxed on the total cost of rides , less expenses, which include Uber's fees and , for most of us, I think, the standard mileage deduction


----------



## FLKeys (Dec 27, 2018)

1099, 1099-MISC, 1099-K some people use these terms generically instead of what they really are. It would really help if everyone used them correctly, but I doubt that will ever happen. I did not receive any of that above from Uber or Lyft I only received summaries from both in different formats. 

I'm in no hurry to file my taxes so I still have not gone over mine in great detail my initial look makes it look like the Uber summary is off some maybe just over $100.00 My Lyft summary looks to be off by about $15.00. I'll dig into it as time permits and get to the bottom of it. I'll be sure to report back.


----------



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

oldfart said:


> No
> your 1099 misc does not have your rideshare income (income from giving rides) on it.
> 
> And the 1099k includes all the money your passengers paid, befor Uber took their fees
> ...


Legally what i said is the truth, one of the expenses is the cut that uber takes.

THe 1099 includes everything uber charged the customer, with the portion that uber takes being deductable.

We all know that is BS but it is reality.


----------



## oldfart (Dec 22, 2017)

Stevie The magic Unicorn said:


> Legally what i said is the truth, one of the expenses is the cut that uber takes.
> 
> THe 1099 includes everything uber charged the customer, with the portion that uber takes being deductable.
> 
> We all know that is BS but it is reality.


When I saw "your revenue" I thought of the money that's deposited to my bank account. But that's not what you meant.


----------



## Joesmith2012 (Oct 7, 2017)

Lawlet91 said:


> No, the amount charged to Uber is by the law money you earned, which you are required to claim, what you earned is irrelevant in the eyes of the IRS because you are taxed based on the total cost of rides, Uber is not


That makes no sense the amount the fee taken out by Uber is their earnings it's not mine. Uber company will pay that tax because its their income, think of it as a 50/50 partnership, if the cooperation earns a 100 pennies, I don't end up being tax for 100 pennies, I'm paying tax on the 50 pennies as a partner and Uber pays tax on his 50 pennies


----------



## Lawlet91 (Jun 8, 2017)

No your taxed on 100 pennies and their taxed on 50 pennies


----------



## Michael1230nj (Jun 23, 2017)

I’m not certain what is being said. The 1099 includes all generated income by me. Including tolls and total charge before deduction. Is someone claiming that when Uber charges more then I’m receiving before standard deduction it’s going on my 1099 as income?


----------



## mmn (Oct 23, 2015)

It's pretty simple. Your gross income is the part you get plus the fees Uber charges. Those fees are deductible as are a bunch of other expenses.


----------



## Michael1230nj (Jun 23, 2017)

Uber at times charges customers far more then the amount I receive. I’m not asking about normal fees or standard deductions.


----------



## mmn (Oct 23, 2015)

Michael1230nj said:


> Uber at times charges customers far more then the amount I receive. I'm not asking about normal fees or standard deductions.


Not "at times", always. They do have to make money too. And the difference is deductible.


----------



## Joesmith2012 (Oct 7, 2017)

I found the answer on the Turbo tax site, you do report all the amount on your 1099, then you can go into deductions and subtract out Ubers take. I posted this on another thread but this is important for people to know


----------



## jhearcht (Feb 16, 2018)

Joesmith2012 said:


> That makes no sense the amount the fee taken out by Uber is their earnings it's not mine.


I agree. The gross amount (of transactions) is 36% more than my net income. Why is UBER's transaction reported on my 1099? Wouldn't it be more meaningful for UBER to report the amount they deposited into my bank account? That would be relevant to my income tax.

Apparently, UBER drivers will have to deduct the overage (gross minus net) as a business expense. But that extra money never passed through my hands, so what does it have to do with my income or expense? Do all subcontractors have to report the general contractor's cut (markup) on their tax reports?


----------



## Irishjohn831 (Aug 11, 2017)

If the lower amount is the only income Uber is reporting paid to you by then to the IRS, why question it.


----------



## FLKeys (Dec 27, 2018)

If you use a credit card at a store to pay for something the store gets the money less a credit card fee. The credit card processor does not record the sale the store does. The store also writes off the fee as an expense. Uber/Lyft is really no different. Their fees just include a little more than credit card processing.


----------



## mmn (Oct 23, 2015)

It's been explained many times. Uber is an intermediary between you and the rider. The rider is paying you via Uber, but Uber is deducting their fees from your gross.

It would be the same thing if the rider paid you directly and Uber billed you for their services. Only difference is this way they are sure to get their cut and don't have the expense of a) billing you and b) using a collection agency when you don't pay.


----------



## jhearcht (Feb 16, 2018)

Irishjohn831 said:


> If the lower amount is the only income Uber is reporting paid to you by then to the IRS, why question it.


I question the number on the 1099 form because it only shows the gross amount charged to the passenger, and says nothing about the net amount that the driver actually received. There is no "lower amount". Why should I report money indicated on the form that has nothing to do with my income as an independent contractor? Perhaps I can deduct it as a business expense, but that would be a lie, because the overage was an expense to the passenger, not to the driver. 



mmn said:


> It's been explained many times. Uber is an intermediary between you and the rider. The rider is paying you via Uber, but Uber is deducting their fees from your gross.
> 
> It would be the same thing if the rider paid you directly and Uber billed you for their services. Only difference is this way they are sure to get their cut and don't have the expense of a) billing you and b) using a collection agency when you don't pay.


That may be true, but UBER is not saying on the form what their fee is. It only reports payments to the payee -- me -- as if I received the gross amount. And makes no mention of UBER's cut. So the IRS will have to accept my undocumented income number, instead of having it stated explicitly on the form. I don't have any evidence of UBER's deposits to my account, except for manually adding up all 52 deposits over the year. I tried to get my online banking app to produce an official summary, but couldn't find a way to do that. Will the IRS just take my word for the amount of my income?


----------



## Older Chauffeur (Oct 16, 2014)

jhearcht said:


> I question the number on the 1099 form because it only shows the gross amount charged to the passenger, and says nothing about the net amount that the driver actually received. There is no "lower amount". Why should I report money indicated on the form that has nothing to do with my income as an independent contractor? Perhaps I can deduct it as a business expense, but that would be a lie, because the overage was an expense to the passenger, not to the driver.


You're paying a commission to Uber for booking the rider for you. If not for that, the fare the rider paid would come to you in full. Deduct those commissions from the amount shown on the 1099 and you should have a match to the total of your automatic bank deposits.
Most drivers seem to be able to make this work. They are able to figure out how much the commissions and fees Uber took.


----------



## Seamus (Jun 21, 2018)

FLKeys said:


> 1099, 1099-MISC, 1099-K some people use these terms generically instead of what they really are. It would really help if everyone used them correctly, but I doubt that will ever happen. I did not receive any of that above from Uber or Lyft I only received summaries from both in different formats.
> 
> I'm in no hurry to file my taxes so I still have not gone over mine in great detail my initial look makes it look like the Uber summary is off some maybe just over $100.00 My Lyft summary looks to be off by about $15.00. I'll dig into it as time permits and get to the bottom of it. I'll be sure to report back.


You should now have your Uber 1099k and if necessary 1099misc available to you. If you didn't get the notice, you can go on to the uber site and download it.

Lyft is another story. Lyft considers themselves to be a "payment processor" (like Arbnb) so unless you meet the IRS threshold of 20k you will not be getting a 1099k or 1099misc from them, only the summary. Since Lyft doesn't issue you 1099's they report nothing of what they paid you to the IRS. It is solely up to you to list that income.



jhearcht said:


> I question the number on the 1099 form because it only shows the gross amount charged to the passenger, and says nothing about the net amount that the driver actually received. There is no "lower amount". Why should I report money indicated on the form that has nothing to do with my income as an independent contractor? Perhaps I can deduct it as a business expense, but that would be a lie, because the overage was an expense to the passenger, not to the driver.
> 
> That may be true, but UBER is not saying on the form what their fee is. It only reports payments to the payee -- me -- as if I received the gross amount. And makes no mention of UBER's cut. So the IRS will have to accept my undocumented income number, instead of having it stated explicitly on the form. I don't have any evidence of UBER's deposits to my account, except for manually adding up all 52 deposits over the year. I tried to get my online banking app to produce an official summary, but couldn't find a way to do that. Will the IRS just take my word for the amount of my income?


No you must report the higher amount that is on the 1099k and 1099misc. The IRS uses matching software that matches what is on the 1099k and 1099misc to what you listed on your schedule C. If it doesn't match you may have a big problem.

As others have said, its pretty simple. Use the 1099k and 1099misc (if applicable) amount as your revenue and then deduct the Uber fees provided for you in the uber summary on your schedule C under Other expenses.


----------



## BigBadJohn (Aug 31, 2018)

Lyft reports your income to the IRS even if you didn't receive a 1099. Lyft and Uber are not required to send you a 1099 due to a 1920 transportation tax law. Serious.


----------



## Seamus (Jun 21, 2018)

BigBadJohn said:


> Lyft reports your income to the IRS even if you didn't receive a 1099.


Sorry, simply not true. Companies only have 2 vehicles for reporting payments.
W2 for employees
1099s for others.(non employees/organizations)

Does NOT mean you don't have to report the income legally, you still are required to report it as income. BUT, no Lyft hasn't provided it to the IRS without a 1099. There simply isn't a vehicle for that. That doesn't mean that if the IRS audits Lyft they couldn't come across that information.

Also whatever Transportation Law you are referring to has no impact on Lyft. Lyft is not a transportation company, they are legally a "payment processor" and fall under those rules (like Arbnb). They are required to send a 1099 if you reach the 20k threshold or 200. payment transactions.


----------



## oldfart (Dec 22, 2017)

jhearcht said:


> I question the number on the 1099 form because it only shows the gross amount charged to the passenger, and says nothing about the net amount that the driver actually received. There is no "lower amount". Why should I report money indicated on the form that has nothing to do with my income as an independent contractor? Perhaps I can deduct it as a business expense, but that would be a lie, because the overage was an expense to the passenger, not to the driver.
> 
> That may be true, but UBER is not saying on the form what their fee is. It only reports payments to the payee -- me -- as if I received the gross amount. And makes no mention of UBER's cut. So the IRS will have to accept my undocumented income number, instead of having it stated explicitly on the form. I don't have any evidence of UBER's deposits to my account, except for manually adding up all 52 deposits over the year. I tried to get my online banking app to produce an official summary, but couldn't find a way to do that. Will the IRS just take my word for the amount of my income?


uber supplies a summary with their fees clearly outlined

and yes the IRS will take your word for it (although Im including my summary with my tax return) 
Our tax system is largely an "on the honor system" thing


----------



## BigBadJohn (Aug 31, 2018)

Sorry but Lyft and Uber both provide the IRS with your earnings no matter if you receive a 1099 or not.


----------



## Seamus (Jun 21, 2018)

Seamus said:


> You should now have your Uber 1099k and if necessary 1099misc available to you. If you didn't get the notice, you can go on to the uber site and download it.
> 
> Lyft is another story. Lyft considers themselves to be a "payment processor" (like Arbnb) so unless you meet the IRS threshold of 20k you will not be getting a 1099k or 1099misc from them, only the summary. Since Lyft doesn't issue you 1099's they report nothing of what they paid you to the IRS. It is solely up to you to list that income.


I apologize I need to read my post more carefully! I was multi tasking and conflated two different issues. Uber and Lyft are the same with the threshold amount to get a 1099k or 1099 misc.

I was also talking to someone about my personal situation when I posted so it didn't come out right!


----------



## Older Chauffeur (Oct 16, 2014)

BigBadJohn said:


> Sorry but Lyft and Uber both provide the IRS with your earnings no matter if you receive a 1099 or not.


Can you please provide support for your statement? See this thread for a discussion about this topic:

https://uberpeople.net/threads/tax-1099-misc.306591/#post-4682824

Specifically, here is a post by UberTaxPro in that thread:



UberTaxPro said:


> Since they're not required to report payments, I doubt they would. Like you said, there is no vehicle for it. Remember however that taxing authorities can and often do audit companies books and could come across items pertaining to you!


----------



## jhearcht (Feb 16, 2018)

oldfart said:


> uber supplies a summary with their fees clearly outlined


Thanks for the tip. I downloaded the Yearly summary from UBER. It's beginning to make sense now. But the summary says my net earnings are $369 more than the sum of bank deposits for the year. I wonder what I'm missing? My cash tips probably didn't amount to that much.


----------



## BigBadJohn (Aug 31, 2018)

For those who question as to whether or not the Rideshare companies provide the IRS with EVERY independent contractors earnings, think of it like this.

Company X for some reason is only providing the IRS independent contractor information IF they have earnings over a specified amount. Those who earn that magical amount are then punished by company X, sends you a dreaded 1099 and your earnings are hand delivered to the IRS and you are now forced to declare your earnings from said company. BUT, If you earn less than the magical amount, well then, company X feels your pain and breaks the tax law and "hides" your earnings from the vicious IRS by not issusing you a 1099 and boy oh boy, it's your lucky day! Kinda like winning the lottery! Even though company X's books show booking fees for rides and insurance coverage for YOU while YOU were driving, as far as company X is concerned, you never existed. Sounds plausible.

It's also a given that Uber and Lyft are audited yearly by the IRS for obvious reasons, let alone for applying for the IPO's.


----------

