# Maximizing Tax Deduction to get a refund



## AFFLIKTION (Dec 18, 2015)

I drive Uber in NYC. Total before they take out commission, car rent, gas is 1700 /week.
I live in midtown manhattan. I want to minimize taxes. Should I incorporate a business in Delaware and have the income run through the business? Will this even matter?

At this point, after commission, rent and gas about 50% of the income will be deductible as business expenses. But I want to be able to receive a tax refund. How can I maximize the refund?


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## Old Rocker (Aug 20, 2015)

Even if you didn't take the standard mileage deduction, Uber's commission isn't tax deductible. Your vehicle 'rent' probably isn't, either, unless you use it exclusively for Uber. You should talk to a tax pro about your situation with your vehicle. Gas isn't deductible if you take the standard mileage deduction.


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## AFFLIKTION (Dec 18, 2015)

I am sharing a car with another guy. we use the car explicitly for uber. Rent is 250 for each of us. We are in manhattan renting from a guy in brooklyn. I read online that uber reports the entire amount you earn to IRS. So i would have thought that you mark down commission and black car fees that uber takes out of the pay as expenses. Am I wrong?


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## LAuberX (Jun 3, 2014)

Uber comission is tax deductable, why would you be liable for taxes on money you did not keep? it is a legitimate business expense.


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## BigNorm4Life (Dec 9, 2015)

LAuberX said:


> Uber comission is tax deductable, why would you be liable for taxes on money you did not keep? it is a legitimate business expense.


Interesting...


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## EcoboostMKS (Nov 6, 2015)

You do business in NYC, so you're going to have to pay NYC taxes. You file a return for every state you do business in. I do trips to CT, NY, and NJ, so I have to file a return for each state because I'm making money in. Trying to pay Delaware taxes while you do all your work in NYC is a huge red flag for an audit.

You'll receive a 1099 for everything uber pays out to you. Uber's commission won't be included in that 1099, so it's not something you'll have to worry about.

Everything business related you can expense. This includes insurance, the fee to rent the car, gas expenses, etc. But if you do your return this way, and i suggest you do in your situation, you can't deduct $.57/mile like most here do.


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## melxjr (Sep 10, 2015)

LAuberX said:


> Uber comission is tax deductable, why would you be liable for taxes on money you did not keep? it is a legitimate business expense.


SRF?


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## Oscar Levant (Aug 15, 2014)

Old Rocker said:


> Even if you didn't take the standard mileage deduction, Uber's commission isn't tax deductible. Your vehicle 'rent' probably isn't, either, unless you use it exclusively for Uber. You should talk to a tax pro about your situation with your vehicle. Gas isn't deductible if you take the standard mileage deduction.


commissions paid is a business expense.


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## UberTaxPro (Oct 3, 2014)

melxjr said:


> SRF?


yes if it's included in your 1099 and I believe it was included in my 1099 last year


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## melxjr (Sep 10, 2015)

UberTaxPro said:


> yes if it's included in your 1099 and I believe it was included in my 1099 last year


If I take the .57.5c Reduction can, am I able to still claim SRF and commission write offs?


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## UberTaxPro (Oct 3, 2014)

AFFLIKTION said:


> I drive Uber in NYC. Total before they take out commission, car rent, gas is 1700 /week.
> I live in midtown manhattan. I want to minimize taxes. Should I incorporate a business in Delaware and have the income run through the business? Will this even matter?
> 
> At this point, after commission, rent and gas about 50% of the income will be deductible as business expenses. But I want to be able to receive a tax refund. How can I maximize the refund?


Do you do your own taxes? Are you paying estimated taxes now? Does your car rent include all maintenance other than gas?


melxjr said:


> If I take the .57.5c Reduction can, am I able to still claim SRF and commission write offs?


yes, *only if those items are included in your gross 1099 amount. *Like LAuberX said "why would you be liable for taxes on money you did not keep?"


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## UberTaxPro (Oct 3, 2014)

AFFLIKTION said:


> I drive Uber in NYC. Total before they take out commission, car rent, gas is 1700 /week.
> I live in midtown manhattan. I want to minimize taxes. Should I incorporate a business in Delaware and have the income run through the business? Will this even matter?
> 
> At this point, after commission, rent and gas about 50% of the income will be deductible as business expenses. But I want to be able to receive a tax refund. How can I maximize the refund?


These are the *major issues* to consider, you're gonna pay tax either way if you have a net profit.
*Shareholders in a corporation are not liable for corporate debts:*
This is the most important attribute of a corporation. In a sole proprietorship the owners are personally responsible for business debts. If the assets of the sole proprietorship cannot satisfy the debt, creditors can go after owner's personal bank account, house, etc. to make up the difference. On the other hand, if a corporation runs out of funds, its owners are usually not liable.
*Sole proprietorships cost less to establish:*
Corporations cost more to set up and run than a sole proprietorship . For example, there are the initial formation fees, filing fees and annual state fees.


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## Old Rocker (Aug 20, 2015)

LAuberX said:


> Uber comission is tax deductable, why would you be liable for taxes on money you did not keep? it is a legitimate business expense.


Are you sure? You tax liability is only on the income reported on your 1099, which is after the commission is taken out.


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## StarzykCPA (Aug 6, 2015)

Old Rocker said:


> Are you sure? You tax liability is only on the income reported on your 1099, which is after the commission is taken out.


The income reported on the 1099 is before commission is taken out. It is deductible.


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## StarzykCPA (Aug 6, 2015)

AFFLIKTION said:


> I drive Uber in NYC. Total before they take out commission, car rent, gas is 1700 /week.
> I live in midtown manhattan. I want to minimize taxes. Should I incorporate a business in Delaware and have the income run through the business? Will this even matter?
> 
> At this point, after commission, rent and gas about 50% of the income will be deductible as business expenses. But I want to be able to receive a tax refund. How can I maximize the refund?


The added costs of the corporation would likely outweigh any benefit, though it is hard to say for sure.

As for maximizing your refund, make sure you track and take all expenses you are entitled to. Consider contributing to a retirement plan for an additional deduction. Those are the top two things that come to my mind. However, you won't necessarily get a refund unless you've been paying in estimates, as UberTaxPro mentioned.


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## Oscar Levant (Aug 15, 2014)

Old Rocker said:


> Only if you are paying taxes on the gross amount before commissions. If the 1099 only shows your income after commissions, you can't deduct commissions.


I seem to recall last year's 1099 was the gross before Commission and I believe I deducted if I recall correctly


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## UberTaxPro (Oct 3, 2014)

Oscar Levant said:


> I seem to recall last year's 1099 was the gross before Commission and I believe I deducted if I recall correctly


That's the way I remember it


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## William1964 (Jul 28, 2015)

To reduce your taxes go find every losing lottery ticket you can go to the racetrack sweep the floor take all those receipts. All those losing tickets for gambling can be written off as a gambling expense. But it helps if you have a winning 1099 whatever it is. I've only had a few


What do I do with 12000 in cash that I deposited into my bank account? I don't get nor do I ask your receipt they print one out every night.

Why would I want to pay taxes on cash income I dont have to prove. So I can report it to the credit bureau.


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## StarzykCPA (Aug 6, 2015)

William1964 said:


> To reduce your taxes go find every losing lottery ticket you can go to the racetrack sweep the floor take all those receipts. All those losing tickets for gambling can be written off as a gambling expense. But it helps if you have a winning 1099 whatever it is. I've only had a few


Yes, careful because gambling losses are limited to your gambling winnings.


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## UberPissed (Aug 13, 2014)

I just wanted to add on that some of my clients have the brilliant idea of forming an S Corp when a sole prop or Pass through LLC is just as good. 

Then, when tax time comes, they can't afford to get an 1120S and a 1040 prepared, and they end up not filing, and they are left a whole other bag of hammers.


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