# So you think you won’t get audited.....



## Older Chauffeur (Oct 16, 2014)

This article appeared in my local paper.
http://venturacountystar.ca.newsmemory.com/?publink=2d5e8dbf5Side gigs like driving for Uber and Lyft are mentioned near the end, under "Inflated Business Expenses."


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## Pax Collector (Feb 18, 2018)

Pretty common sense stuff, really.


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## Fuzzyelvis (Dec 7, 2014)

Older Chauffeur said:


> This article appeared in my local paper.
> http://venturacountystar.ca.newsmemory.com/?publink=2d5e8dbf5Side gigs like driving for Uber and Lyft are mentioned near the end, under "Inflated Business Expenses."


Why would you ever need to INFLATE your expenses? Most drivers are operating at a loss after mileage anyway.


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## Merc7186 (Jul 8, 2017)

Fuzzyelvis said:


> Why would you ever need to INFLATE your expenses? Most drivers are operating at a loss after mileage anyway.


Because some drivers have day jobs and are trying to lower their tax liability of those incomes too. It is very important to get you and your spouse under the $75k threshold, so if you are close, padding your expenses will GRT you where you want to be but at extreme risk to being audited.


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

Merc7186 said:


> Because some drivers have day jobs and are trying to lower their tax liability of those incomes too. It is very important to get you and your spouse under the $75k threshold, so if you are close, padding your expenses will GRT you where you want to be but at extreme risk to being audited.


if your jut a little over it won't have much impact. You only pay the higher rate on income past the threshold.

Honestly... the biggest cheating i do is adding cash revenue, to fudge my numbers up to improve my credit rating.


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## LAuberX (Jun 3, 2014)

Stevie The magic Unicorn said:


> if your jut a little over it won't have much impact. You only pay the higher rate on income past the threshold.
> 
> Honestly... the biggest cheating i do is adding cash revenue, to fudge my numbers up to improve my credit rating.


Income has no effect on credit rating, the credit agencies have zero access to your income. None.

Having higher income on your tax returns will help with debt/income ratio for a home loan application when you supply copies of past returns to the lender, that's it. Nobody else will ever know your income unless you tell them.


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

LAuberX said:


> Income has no effect on credit rating, the credit agencies have zero access to your income. None.
> 
> Having higher income on your tax returns will help with debt/income ratio for a home loan application when you supply copies of past returns to the lender, that's it. Nobody else will ever know your income unless you tell them.


I'm sorry... fudging my income up to appear better for possible loan applications, like the Mortgage i got this year for the vacation rental i bought for extra income.


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## RideshareSpectrum (May 12, 2017)

Older Chauffeur said:


> This article appeared in my local paper.
> http://venturacountystar.ca.newsmemory.com/?publink=2d5e8dbf5Side gigs like driving for Uber and Lyft are mentioned near the end, under "Inflated Business Expenses."


Meh. Who cares? I've been audited before. It only matters if you 1. Cheat on your taxes or 2. Don't hold on to all your records and receipts to back up every deduction for a few years. 
The best way to stay off the radar besides ^ is to have a CPA prepare your taxes for you.


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## SEAL Team 5 (Dec 19, 2015)

Fuzzyelvis said:


> Why would you ever need to INFLATE your expenses? Most drivers are operating at a loss after mileage anyway.


Last year there was a forum member that deducted a $22,000 business loss on his Schedule C by stating that he was in Destination Mode everyday to and from work. His total Uber revenue for the '17 tax year was only $600, yet incurred over 40,000 miles. I warned him about just because you drive in DM mode does not mean those miles are deductible. He stated that his CPA instructed him it was legal. By the way, I haven't seen any activity from that member since.


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## 25rides7daysaweek (Nov 20, 2017)

Fuzzyelvis said:


> Why would you ever need to INFLATE your expenses? Most drivers are operating at a loss after mileage anyway.


I got a big tax bill this year, neither of us were under 75k. I dont know about most drivers but I made so much that I got pushed up into a higher tax bracket....


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## SEAL Team 5 (Dec 19, 2015)

25rides7daysaweek said:


> I got a big tax bill this year, neither of us were under 75k. I dont know about most drivers but I made so much that I got pushed up into a higher tax bracket....


If you don't mind posting what was your SE line 4 amount?


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## AuxCordBoston (Dec 3, 2016)

RideshareSpectrum said:


> Meh. Who cares? I've been audited before. It only matters if you 1. Cheat on your taxes or 2. Don't hold on to all your records and receipts to back up every deduction for a few years.
> The best way to stay off the radar besides ^ is to have a CPA prepare your taxes for you.


Were you doing rideshare when audited? If so what did the IRS ask for?


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## UberBastid (Oct 1, 2016)

SEAL Team 5 said:


> Last year there was a forum member that deducted a $22,000 business loss on his Schedule C by stating that he was in Destination Mode everyday to and from work. His total Uber revenue for the '17 tax year was only $600, yet incurred over 40,000 miles. I warned him about just because you drive in DM mode does not mean those miles are deductible. He stated that his CPA instructed him it was legal. By the way, I haven't seen any activity from that member since.


You can reach him at:

Pollock Fed Penitentiary
1000 Airbase Rd
Grant Parish, Louisiana


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## Older Chauffeur (Oct 16, 2014)

^^^^:laugh::laugh::laugh:


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## Ubergaldrivet (Feb 6, 2019)

Fuzzyelvis said:


> Why would you ever need to INFLATE your expenses? Most drivers are operating at a loss after mileage anyway.


Correct, and the IRS will begin to not allow yr to yr losses. After a couple of years it will be classed as a hobby.


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## UberBastid (Oct 1, 2016)

Ubergaldrivet said:


> Correct, and the IRS will begin to not allow yr to yr losses. After a couple of years it will be classed as a hobby.


Which is why I always show a thousand bux or so as profit, and pay the $10 or so in taxes.


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## TheDevilisaParttimer (Jan 2, 2019)

SEAL Team 5 said:


> Last year there was a forum member that deducted a $22,000 business loss on his Schedule C by stating that he was in Destination Mode everyday to and from work. His total Uber revenue for the '17 tax year was only $600, yet incurred over 40,000 miles. I warned him about just because you drive in DM mode does not mean those miles are deductible. He stated that his CPA instructed him it was legal. By the way, I haven't seen any activity from that member since.


He's already deducted his free car, his Uber days are over.


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## Ubergaldrivet (Feb 6, 2019)

TheDevilisaParttimer said:


> He's already deducted his free car, his Uber days are over.


Guess my 313 loss is fine then


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## FLKeys (Dec 27, 2018)

You can continue to lose money year after year doing Uber/Lyft and not have it classified as a hobby. There are additional test the IRS uses to determine if it is a hobby.

https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses

Question
How do you distinguish between a business and a hobby?
Answer
In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. A hobby activity is done mainly for recreation or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit:

Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
Whether the time and effort you put into the activity indicate you intend to make it profitable.
*Whether you depend on income from the activity for your livelihood.*
Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
Whether you change your methods of operation in an attempt to improve profitability.
Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
Whether you were successful in making a profit in similar activities in the past.
Whether the activity makes a profit in some years and how much profit it makes.
Whether you can expect to make a future profit from the appreciation of the assets used in the activity.


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## Michael1230nj (Jun 23, 2017)

Sheeeze. Auditing Uber Drivers. That would really raise a lot of Income.


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## Over/Uber (Jan 2, 2017)

Michael1230nj said:


> Sheeeze. Auditing Uber Drivers. That would really raise a lot of Income.


Yeah, at least a $10K per audit process to catch $3K worth of cheating.


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