# Weekly rental in NYC



## Notauberhater (Jan 26, 2016)

If you rent a car weekly at let's say $400 and work full time for a year can you deduct the rental ?


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## Older Chauffeur (Oct 16, 2014)

Not a tax expert, but here's my take on this from reading on the IRS website about deducting vehicle costs for business purposes. You are allowed to use a *leased* vehicle; so if by rental that's what you mean, ok. There may be rules prohibiting rental cars for Uber, both from Uber themselves and the agencies like Hertz. How many miles would you be allowed on the rental?
You can choose actual costs or take the standard mileage rate of $00.54 per mile for business use. The break even point would be approximately 38500 business miles (740 per week.) 38500 X .54= $20,790, as 52 weeks @ $400 is $20,800. So if you drive more than that and keep a written, contemporaneous mileage log, you would do better deducting mileage costs rather than the lease.
If what you have in mind is renting/leasing one of the "drive for Uber" special car deals, please do your due diligence and research it thoroughly on this forum. It is going to be really hard to make anything for yourself at the Uber rates. Ask the drivers in the NYC forum how they are doing.
Just playing around with the numbers some more; the first 228 *paid *miles (@$1.75 current rate) are going just to pay the rental. Then you have your commercial insurance and all the other fees, taxes, etc required to drive for hire in NYC. My figures are for Uber X. Don't forget Uber's cut comes out of that $1.75, so it's even more miles to pay the $400.


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## I_Love_Uber_Not (Jan 28, 2016)

Older Chauffeur said:


> Not a tax expert, but here's my take on this from reading on the IRS website about deducting vehicle costs for business purposes. You are allowed to use a *leased* vehicle; so if by rental that's what you mean, ok. There may be rules prohibiting rental cars for Uber, both from Uber themselves and the agencies like Hertz. How many miles would you be allowed on the rental?
> You can choose actual costs or take the standard mileage rate of $00.54 per mile for business use. The break even point would be approximately 38500 business miles (740 per week.) 38500 X .54= $20,790, as 52 weeks @ $400 is $20,800. So if you drive more than that and keep a written, contemporaneous mileage log, you would do better deducting mileage costs rather than the lease.
> If what you have in mind is renting/leasing one of the "drive for Uber" special car deals, please do your due diligence and research it thoroughly on this forum. It is going to be really hard to make anything for yourself at the Uber rates. Ask the drivers in the NYC forum how they are doing.


You can not use the mileage deduction on a rental, only the rental fee, you need to be the owner of the vehicle to use the mileage deduction, also the rental deduction is not 100% deductible, only a fraction us.


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## Notauberhater (Jan 26, 2016)

I_Love_Uber_Not said:


> You can not use the mileage deduction on a rental, only the rental fee, you need to be the owner of the vehicle to use the mileage deduction, also the rental deduction is not 100% deductible, only a fraction us.


What fraction is


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## I_Love_Uber_Not (Jan 28, 2016)

Notauberhater said:


> What fraction is


Ask your accountant. If your rental is $400 a week, that is $20,800 a year, the IRS does not let you deduct $20,800 on your tax bill, the person charging you the rent also has to pay taxes on that money. 
In the end that rental money, you will not see much of it back, it's the cost of doing business.


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## Uberboob (Dec 15, 2015)

How much will you have to pay above the rental fee for the beat up interior when you turn it back in? I think you'll have to work more than full time (40 hrs) to make any money, and even then it probably won't be worth it. If you're doing black car then maybe the clientele won't be as rough on the car.


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## Older Chauffeur (Oct 16, 2014)

I_Love_Uber_Not said:


> You can not use the mileage deduction on a rental, only the rental fee, you need to be the owner of the vehicle to use the mileage deduction, also the rental deduction is not 100% deductible, only a fraction us.


IRS specifies owned or leased vehicle, doesn't mention rental, which is what I said in my reply to the OP. The fraction allowed is determined by the amount of business use. If you can prove 100% business use, you take all the lease costs or all the miles, whichever benefits you the most.
The lessor (entity that owns the vehicle leased to you) pays taxes on net income, just like any other business. You, as the lessee, write off your costs of doing business. Neither pays based on what write offs the other may claim.


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## Older Chauffeur (Oct 16, 2014)

The bottom line here is you have to make way more than the costs associated with any vehicle to make it worth driving for Uber. If you can somehow make the pie-in-the-sky $90k a year Travis spouts to the media, then all the vehicle costs you can legitimately deduct will lower your tax liability and let you keep more of that $90k.


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## UberTaxPro (Oct 3, 2014)

Older Chauffeur said:


> The bottom line here is you have to make way more than the costs associated with any vehicle to make it worth driving for Uber. If you can somehow make the pie-in-the-sky $90k a year Travis spouts to the media, then all the vehicle costs you can legitimately deduct will lower your tax liability and let you keep more of that $90k.


Yes, keep more of that 90K so you can buy another car!


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## UberTaxPro (Oct 3, 2014)

I_Love_Uber_Not said:


> You can not use the mileage deduction on a rental, only the rental fee, you need to be the owner of the vehicle to use the mileage deduction, also the rental deduction is not 100% deductible, only a fraction us.


If you lease a car, truck, or van that you use in your business, you can use the standard mileage rate or actual expenses to figure your deductible expense.
In general, a taxpayer can deduct rent as an expense only if the rent is for property used in the taxpayer's trade or business. If the taxpayer has or will receive equity in or title to the property, the rent is not deductible. The business % of the rent must be factored. If the vehicle is used 100% for business the rent is 100% deducible.


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## Older Chauffeur (Oct 16, 2014)

UberTaxPro said:


> If you lease a car, truck, or van that you use in your business, you can use the standard mileage rate or actual expenses to figure your deductible expense.
> In general, a taxpayer can deduct rent as an expense only if the rent is for property used in the taxpayer's trade or business. If the taxpayer has or will receive equity in or title to the property, the rent is not deductible. The business % of the rent must be factored. If the vehicle is used 100% for business the rent is 100% deducible.


UTP, does the IRS differentiate between car leasing and rental? I've always thought of rentals as being short term arrangements through Hertz, Enterprise, etc. I wonder if sthe OP is actually asking about that, or means instead leasing as commonly used for longer term use.


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## UberTaxPro (Oct 3, 2014)

Older Chauffeur said:


> UTP, does the IRS differentiate between car leasing and rental? I've always thought of rentals as being short term arrangements through Hertz, Enterprise, etc. I wonder if sthe OP is actually asking about that, or means instead leasing as commonly used for longer term use.


"Rented or leased property includes real estate, machinery, and other items that a taxpayer uses in his or her business and does not own. Payments for the use of this property may be deducted as long as they are reasonable. However, special rules and limitations apply to business use of the taxpayer's rented personal residence and leased automobiles." So no there isn't a differentiation between leasing and renting other than to claim the standard mileage deduction you would have to be in a "lease". In the taxi industry drivers often rent or lease vehicles by the shift, day or week. I don't think those short term renters would qualify to use the standard mileage deduction but would qualify to use the actual expense method and deduct the rent(lease). I think!


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## Barbj379 (Jan 13, 2016)

So you're saying the money taken out of our account for renting the car each week would supersede the standard $.54/mile... Or do we just take whatever is greater, and apply that to the tax deductions? In this example:



Older Chauffeur said:


> The break even point would be approximately 38500 business miles (740 per week.)


they seem almost equal; however, that doesn't seem like a logical amount to apply to deductions. The amount of money being taxed may even not be that much I think.


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