# Do I have to include uber in my taxes if I only made $1200 last year?



## kay_ (Nov 20, 2016)

I also worked at starbucks, and my total income from that job was a little over $10k

I was getting a refund back of about $800, then I entered my uber info and it went down to $143!!!

I tried to put in as many expenses as I could, mileage etc. and it only brought it up to $450

What. The. Hell.


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## jester121 (Sep 6, 2016)

You have to include it in your income no matter how much you made. It's "income" tax, not "main-job-except-for-my-side-gig" tax.

Give yourself a raise -- change your withholding at your main job so you don't get a refund. The Treasury doesn't need your interest-free loan all year.


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## Shangsta (Aug 15, 2016)

jester121 said:


> You have to include it in your income no matter how much you made. It's "income" tax, not "main-job-except-for-my-side-gig" tax.
> 
> Give yourself a raise -- change your withholding at your main job so you don't get a refund. The Treasury doesn't need your interest-free loan all year.


Problem is if she did that she would have owed money. Much better to get a small refund than have to pay.


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## kay_ (Nov 20, 2016)

I'm using turbo tax, but it's a complete mess.


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## Fredly00 (Jan 24, 2017)

Yes you need to claim it over 600$

I guess turbo tax is good, but I've been using taxact for about 10yrs now, love the system real time updates and flags for errors.


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## hotlanta (Jan 14, 2017)

Don't forget your self-employment tax...


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## hotlanta (Jan 14, 2017)

Also, in every case I've seen where Uber drivers are deducting everything appropriately, they come out ahead because of the Uber driving. I'm sure there are odd cases here and there where that isn't the case, but all my Uber money is tax free and it reduces my tax bill from other income sources considerably.


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## UberTaxPro (Oct 3, 2014)

Fredly00 said:


> Yes you need to claim it over 600$
> 
> I guess turbo tax is good, but I've been using taxact for about 10yrs now, love the system real time updates and flags for errors.


Over $400 net you have to file SE tax.


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## UberTaxPro (Oct 3, 2014)

hotlanta said:


> Also, in every case I've seen where Uber drivers are deducting everything appropriately, they come out ahead because of the Uber driving. I'm sure there are odd cases here and there where that isn't the case, but all my Uber money is tax free and it reduces my tax bill from other income sources considerably.


Sounds like good tax planning! What you're doing is legal and you're utilizing what maybe the last legal "loophole" available. I'm sure you know, but for the sake of everyone else, it's very important that you maintain excellent records in your situation. Lowering income utilizing schedule c losses is without a doubt a "red flag" these days, however you're 100% entitled to utilize the deduction and with the proper records you'll win should a red flag land in your direction. You'll also need to keep an eye on the hobby loss rule if you continue with this business. Any barriers from the hobby loss rule can be overcome with proper record keeping that makes it clear you're in fact running a business.


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## RussellP (Dec 9, 2016)

hotlanta said:


> Also, in every case I've seen where Uber drivers are deducting everything appropriately, they come out ahead because of the Uber driving. I'm sure there are odd cases here and there where that isn't the case, but all my Uber money is tax free and it reduces my tax bill from other income sources considerably.


Basic proof that it costs you more to uber than you make with it... It may have reduced your tax bill, so you think you come out ahead but... taxes are always a percentage of real money, meaning you technically be farther ahead if you didn't uber at all!

I tell people all the time that Ubering is not a job, an expensive hobby...


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## Older Chauffeur (Oct 16, 2014)

kay_ said:


> I'm using turbo tax, but it's a complete mess.


Which TurboTax version and format are you using? My understanding is that their online filing requires that you use Home and Business in order to include rideshare income/expenses. If you buy the CD, you can use the cheaper Deluxe version. It has everything you need to report profit/loss from self employment .
Is $1200 your gross or net profit from ridesharing?
Keep in mind that if you had made an extra $1200 at your regular job, taxes would have already been withheld, so your refund wouldn't have been reduced as much.
Are you claiming all business mileage, including dead miles? If you kept a log to substantiate your deduction, the mileage expense ought to reduce your profit on $1200 considerably, if that was your gross. If that was your net after expenses, the FICA self employment taxes alone would be about $153, plus regular income tax.
Disclosure: I'm not a tax professional.


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## jester121 (Sep 6, 2016)

RussellP said:


> taxes are always a percentage of real money, meaning you technically be farther ahead if you didn't uber at all!


Arguable, and downright wrong in a business setting.

The $0.54 mileage deduction is not "real money" but certainly impacts taxes.

Drivers are constantly turning conceptual value (or equity) from their vehicles into cash, that's the basis of the whole thing.... and it has very real impact on taxation.


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## RussellP (Dec 9, 2016)

UberTaxPro said:


> Sounds like good tax planning! What you're doing is legal and you're utilizing what maybe the last legal "loophole" available. I'm sure you know, but for the sake of everyone else, it's very important that you maintain excellent records in your situation. Lowering income utilizing schedule c losses is without a doubt a "red flag" these days, however you're 100% entitled to utilize the deduction and with the proper records you'll win should a red flag land in your direction. You'll also need to keep an eye on the hobby loss rule if you continue with this business. Any barriers from the hobby loss rule can be overcome with proper record keeping that makes it clear you're in fact running a business.


UberTaxPro is right, but this page raises some good questions...
https://www.irs.gov/uac/is-your-hobby-a-for-profit-endeavor

Particularly...
"An activity is presumed for profit if it makes a profit in at least three of the last five tax years, including the current year."
"If an activity is not for profit, losses from that activity may not be used to offset other income. An activity produces a loss when related expenses exceed income."
"If your activity is not carried on for profit, allowable deductions cannot exceed the gross receipts for the activity."

So the trick is going to be proving that it's actually a For-Profit endeavor. If you do this for several years without showing a profit, they might come after you for past years?


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## RussellP (Dec 9, 2016)

jester121 said:


> Arguable, and downright wrong in a business setting.
> 
> The $0.54 mileage deduction is not "real money" but certainly impacts taxes.
> 
> Drivers are constantly turning conceptual value (or equity) from their vehicles into cash, that's the basis of the whole thing.... and it has very real impact on taxation.


The $0.54 deduction is summation of all the costs associated with operating a vehicle... it does relate to real money, including money you already paid when you bought your car. I agree, Rideshare is an excersize in extracting money out of the equity (remaining life) of your vehicle... But again, if you didn't Uber, your car might last 2x or 3x longer before you need a new one... So again, it's operating at a loss.

If we got paid for dead-miles too then we'd be all set... But when you get $0.75 per mile with a rider in the car and the cost is $0.54, you aren't even making that 21 cents because you are pretty much guaranteed to have dead miles before or after the trip, so anything more than 0.3 dead miles causes you to take a loss. Overall, for me, in my service area, and only being able to drive UberX, 90% of my trips are a loss, and 10% (with surge) are profitable. Overall combined, it's all a loss.

Knowing that it's a loss, and not having any way to make it become profitable, it would be hard to argue that it's a For-Profit venture and not just a Hobby with losses.


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## UberTaxPro (Oct 3, 2014)

RussellP said:


> UberTaxPro is right, but this page raises some good questions...
> https://www.irs.gov/uac/is-your-hobby-a-for-profit-endeavor
> 
> Particularly...
> ...


You don't neccessarly have to show a profit ever although it would certainly help! *You have to be able to prove that you're attempting to make a profit in the years you show a loss.* In addition to required records like mileage logs etc... you'd want to show things like a business plan, evidence that you went to profesionals for advice, education to improve, changes in business strategy etc..... As long as you have the records and documentation you'll be fine. Without records and documentation its easy for the IRS to declare a business losing money a "hobby".
Yes, they might come after you for past years


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## jester121 (Sep 6, 2016)

RussellP said:


> The $0.54 deduction is summation of all the costs associated with operating a vehicle... it does *relate to* real money,


*Relate to*, yes. That was my point.

Businesses carry assets (like vehicles) on the balance sheet at a book value measured in real accounting dollars, depreciate them in real accounting dollars periodically (which is recorded as an expense), and that results in offsetting revenue received as cash money. Business taxes are based on profit, or revenue less expenses.

Us driving slobs don't book depreciation, generally, unless it's for a statement of net worth, which is basically useless for anything but bragging rights. So it doesn't matter one tiny bit if my 2015 vehicle is, technically, worth X% or $Y less on December 31, because I'm not doing GAAP financial statements on myself. All that matters is I was able to invest some time, and the fact that I have a car that operates, and turn it into some cash. The mileage deduction is just a handy way to keep us peasants from storming Washington with rifles and torches if the government tried taxing us on the cash income.

(Russell, I know you already know all this; it's just a free lecture I like giving from time to time. Everyone tells me it's worth every penny.)


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## jester121 (Sep 6, 2016)

UberTaxPro said:


> You don't neccessarly have to show a profit ever although it would certainly help! *You have to be able to prove that you're attempting to make a profit in the years you show a loss.* In addition to required records like mileage logs etc... you'd want to show things like a business plan, evidence that you went to profesionals for advice, education to improve, changes in business strategy etc..... As long as you have the records and documentation you'll be fine. Without records and documentation its easy for the IRS to declare a business losing money a "hobby".
> Yes, they might come after you for past years


I doubt there's any case law about Ubering, or that there ever would be, but keep in mind the hobby exceptions are designed more for guys who say "I'm going to start my own racing team so I can deduct a sports car and all my parts and fuel and track day fees from my taxes." That won't cut the mustard.

Crushing your soul into a little pile of slag by driving for Uber wouldn't likely ever be considered a hobby, because it sucks so much and isn't any fun. I think the investigating IRS agent would feel sorry for us and move on.


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