# Quarterly Taxes are 46% of Net Earnings? Really?



## MikesUber (Oct 23, 2015)

So for quarterly tax prep my CPA is telling me the following:

46% of net earnings

25% Fed
15.3 % FICA
3.07% State
3% City

Pittsburgh, PA

Having zero experience with taxes, is this remotely correct? I've read about 25-30% is what should be set aside for taxes. But nearly half? That seems way too high.

Any help?


Thanks


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## I_Like_Spam (May 10, 2015)

The figures are absolutely correct, IF you have another regular job.

If Uber is your sole gig, the taxes are less.

25% Fed tax is right for a single file earning more than 37 after deductions and exemptions.


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## UberTaxPro (Oct 3, 2014)

MikesUber said:


> So for quarterly tax prep my CPA is telling me the following:
> 
> 46% of net earnings
> 
> ...


How much money are you planning on making? http://www.bankrate.com/finance/taxes/tax-brackets.aspx
The FICA is correct. The Fed depends on how much you end up making for the year. The State is correct for PA. The city I don't know.


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## MikesUber (Oct 23, 2015)

I_Like_Spam said:


> The figures are absolutely correct, IF you have another regular job.
> 
> If Uber is your sole gig, the taxes are less.
> 
> 25% Fed tax is right for a single file earning more than 37 after deductions and exemptions.


Much appreciated, and from another Pittsburgher as well!

I do have a full-time job so that would explain the taxation. Well damn that is HIGH


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## MikesUber (Oct 23, 2015)

UberTaxPro said:


> How much money are you planning on making? http://www.bankrate.com/finance/taxes/tax-brackets.aspx


 Awesome resources guys I appreciate the prompt responses. Yes that 25% Fed rate is correct as I am single (unmarried) and will fall in the $37,451 to $90,750 earnings bracket for 2016.


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## Stygge (Jan 9, 2016)

MikesUber said:


> So for quarterly tax prep my CPA is telling me the following:
> 
> 46% of net earnings
> 
> ...


46% of close to zero is even closer to zero!


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## MikesUber (Oct 23, 2015)

Stygge said:


> 46% of close to zero is even closer to zero!


You mean net earnings after expenses? What I'm claiming as taxable income?


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## Disgusted Driver (Jan 9, 2015)

Yeah but what are your net earnings from Uber? Certainly not what you get paid each week. After considering mileage your net earnings should be less than 1/2 the payments you received. No point in deducting more just to wait to get it back. One other tip. If you have a regular job, up your withholding in Nov. and Dec . by 1K or so to pay some of the estimated tax. Money withheld from your check is considered to have come in throughout the year so you won't be penalized as much for not paying quarterly.


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## MikesUber (Oct 23, 2015)

Disgusted Driver said:


> you won't be penalized as much for not paying quarterly


I am paying quarterly though?


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## Stygge (Jan 9, 2016)

MikesUber said:


> You mean net earnings after expenses? What I'm claiming as taxable income?


Yes. As you can deduct about $1.08 per paid mile plus uber fees, there shouldn't be a lot of net income unless you're a master of the surge game.


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## Disgusted Driver (Jan 9, 2015)

What I'm saying is that if I suspect I will owe 3K in fed taxes at the end of the year, In Nov. and Dec. I'll instruct my employer to withhold 1.5K additional from my check for Nov. and Dec., giving them the 3K at the end of the year instead of throughout the year. I get to hold onto my money longer and use it for other things.


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## I_Like_Spam (May 10, 2015)

As long as you pay 100% of your 2015 tax liability through your regular job, you won't have a tax penalty in 2016. If 2016 is your first year ubering and you got an tax refund for your 2015 taxes, you should be good to go.

You'll still owe the same amount of money, however and need to pay it by next april.


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## MikesUber (Oct 23, 2015)

I_Like_Spam said:


> As long as you pay 100% of your 2015 tax liability through your regular job, you won't have a tax penalty in 2016. If 2016 is your first year ubering and you got an tax refund for your 2015 taxes, you should be good to go.
> 
> You'll still owe the same amount of money, however and need to pay it by next april.


 I started October 2015, paid 2015 taxes on U/L this past April on my F/T W2. I'm prepping 2016 Q2 payments now for U/L


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## I_Like_Spam (May 10, 2015)

MikesUber said:


> I started October 2015, paid 2015 taxes on U/L this past April on my F/T W2. I'm prepping 2016 Q2 payments now for U/L


If you had to cut an additional check in April to the IRS, you definitely should be making quarterlies.

However, you have another option, you can just increase your withholding at your regular job, by submitting a new W-4 to the employer


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## LAuberX (Jun 3, 2014)

do you log your miles? if you have one dead mile for every paid mile you will owe zero taxes driving UberX/Pool


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## MikesUber (Oct 23, 2015)

I_Like_Spam said:


> If you had to cut an additional check in April to the IRS, you definitely should be making quarterlies.
> 
> However, you have another option, you can just increase your withholding at your regular job, by submitting a new W-4 to the employer


My CPA just took my 2015 U/L taxes from my tax refund this year. It was like, "You owe X in rideshare taxes, you're getting back Y from your FT tax refund, so I'll just take what you owe from Y and you'll get the balance of Z". From reading on here quarterlies seemed like the best way to go to avoid penalties but I see the other option that you mentioned.

Only second full quarter doing this so it's very new to me. I'm one of those "just tell me where to sign [what I owe]" type of people that just want it done and am too fast moving for the details. I did want to take a step back however and start this thread to at least understand some basics of what's happening here tax-wise.


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## MikesUber (Oct 23, 2015)

LAuberX said:


> do you log your miles? if you have one dead mile for every paid mile you will owe zero taxes driving UberX/Pool


I try to drive surge only so I was seeing 1 mile = $1.50/$2.00 (estimate). Rarely will I drive more miles than dollars earned in a night.

For mileage I just have an overall number for the night, I'll zero out my trip meter then record the ending mileage when I pull in the driveway at the end of my shift.

Edit: For my Excel documentation I did add up Uber's on-trip mileage and compared it to my total mileage which would give me dead miles as the difference.


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## Older Chauffeur (Oct 16, 2014)

MikesUber said:


> I try to drive surge only so I was seeing 1 mile = $1.50/$2.00 (estimate). Rarely will I drive more miles than dollars earned in a night.
> 
> For mileage I just have an overall number for the night, I'll zero out my trip meter then record the ending mileage when I pull in the driveway at the end of my shift.
> 
> Edit: For my Excel documentation I did add up Uber's on-trip mileage and compared it to my total mileage which would give me dead miles as the difference.


You need a contemporaneous mileage log for the IRS. Total miles from each shift based on the trip meter won't cut it. Use the starting and ending permanent odometer readings instead, and keep a written record of the date and purpose of business miles, such as "rideshare." Some drivers use mileage programs, but I have not tried them, so can't speak to that. Discussions elsewhere in this forum about those programs.


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## I_Like_Spam (May 10, 2015)

The tax


MikesUber said:


> My CPA just took my 2015 U/L taxes from my tax refund this year. It was like, "You owe X in rideshare taxes, you're getting back Y from your FT tax refund, so I'll just take what you owe from Y and you'll get the balance of Z". From reading on here quarterlies seemed like the best way to go to avoid penalties but I see the other option that you mentioned.


When I was driving Yellow Cab, the taxes were the worst thing for me, I didn't have a CPA. Estimating how much of a check to cut them on the quarterlies, was the worst as income was really all over the place. I got a $3000 refund one year, and owed $3600 to the feds the next it was crazy.

And of course, with YC, I didn't have to log mileage, the deductions were just the paid leases and gas receipts- the hard part was figuring how much in gross income as there were no 1099's of course.


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## MikesUber (Oct 23, 2015)

I_Like_Spam said:


> The tax
> 
> When I was driving Yellow Cab, the taxes were the worst thing for me, I didn't have a CPA. Estimating how much of a check to cut them on the quarterlies, was the worst as income was really all over the place. I got a $3000 refund one year, and owed $3600 to the feds the next it was crazy.
> 
> And of course, with YC, I didn't have to log mileage, the deductions were just the paid leases and gas receipts- the hard part was figuring how much in gross income as there were no 1099's of course.


Yeah taxes are definitely a pain, I'll just have to plan on setting aside a little more taxes. That's why I wanted to check so I wouldn't get slammed with huge quarterlies and no money set aside. Thanks again


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## MikesUber (Oct 23, 2015)

Older Chauffeur said:


> You need a contemporaneous mileage log for the IRS. Total miles from each shift based on the trip meter won't cut it. Use the starting and ending permanent odometer readings instead, and keep a written record of the date and purpose of business miles, such as "rideshare." Some drivers use mileage programs, but I have not tried them, so can't speak to that. Discussions elsewhere in this forum about those programs.


Thanks for the heads up I'll have to update my records going forward. Tried Sherpashare for a hot second but the app was too confusing and UX not intuitive.


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## Fireguy50 (Nov 23, 2015)

UberTaxPro said:


> How much money are you planning on making? http://www.bankrate.com/finance/taxes/tax-brackets.aspx
> The FICA is correct. The Fed depends on how much you end up making for the year. The State is correct for PA. The city I don't know.


Yep, which is why it's annoying when people brag on here and to the PAX how much they make. The Uber deposits aren't free money. Vehicle costs and taxes cut your pay big time.

This is what makes Uber a partial scam. They promise earnings that you'll owe the government, plus vehicle wear.


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## wk1102 (Dec 25, 2015)

You should be able to claim 2 miles for every paid mile, even more if you are a little creative.


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## UberTaxPro (Oct 3, 2014)

Fireguy50 said:


> Yep, which is why it's annoying when people brag on here and to the PAX how much they make. The Uber deposits aren't free money. Vehicle costs and taxes cut your pay big time.
> 
> This is what makes Uber a partial scam. They promise earnings that you'll owe the government, plus vehicle wear.


Yes, same partial scam that taxi companies have been using on "owner operators" for years but was never really in the public eye. Uber takes it a step further with the incredibly low rates and the amount of people they scam.


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## Fireguy50 (Nov 23, 2015)

UberTaxPro said:


> Yes, same partial scam that taxi companies have been using on "owner operators" for years but was never really in the public eye. Uber takes it a step further with the incredibly low rates and the amount of people they scam.


When they run their loud mouth in front of PAX it gives a false impression the we don't need supplemental Tips to make it profitable.


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## UberPissed (Aug 13, 2014)

http://taxfoundation.org/article/2016-tax-brackets

This will give you a list of the marginal rates.

Remember - this isn't on your TOTAL INCOME, its your TAXABLE INCOME (which = your AGI less your itemized/standard deduction and your exemption(s).

So if you have a household of 5, and your standard deduction is 12,600, you would get close to 33,000 in deductions. If your total income is 50k, then your taxable income is around 17k, which means you pay 10% tax on that.

Also - never, never, never, never decline earning income because it would "put you into a different bracket". Only that extra money would be put in that higher bracket (e.g., if you earn 49,999, and the next bracket is 50,000, earning one extra dollar will have little impact on your tax liability, as that last dollar will only be taxed at the higher marginal rate.


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## Harley1 (Mar 13, 2016)

Im a courier as well. What do you guys think in terms of deductions for deliveries? Same miles, but parking meters as well?


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