# Drive around in driver mode all the time?



## Flarpy (Apr 17, 2016)

Am I right when I guess that Uber/Lyft reports how many miles you've driven all the time you're in driver mode for end-of-year taxes?

Does this mean (theoretically of course) that if you drive around in driver mode all the time and ignore all pings that you would generate a net loss (at $0.55/mile or whatever it is) for tax purposes? And that loss could be deducted from a different self-employment business... one that generated a profit?

Just wondering....


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## tohunt4me (Nov 23, 2015)

Correct


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## tohunt4me (Nov 23, 2015)

As long as you are driving in an area where Uber us available.


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## Flarpy (Apr 17, 2016)

Thanks. Of course one would have to have a reasonable income from those miles driven, one couldn't just drive around 10,000 miles and have nothing to show for it or the IRS would disallow those deductions. But you get what I'm saying.


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## Null (Oct 6, 2015)

I think you're misunderstanding the deduction.

You can deduct for business related miles. If your INTENTION is not to transport passengers and just have an app on or do so while getting groceries, that doesn't count as a business purpose. Your intent plays a big part in the legitimacy of the deduction. Legitimacy and what you can probably get away with are two different things, as you seem to allude to.

No, Uber and Lyft do NOT report to the IRS how many miles you were app on. They submit a 1099k to you which showcases gross receipts. They report to the IRS as if they were a credit card processor like PayPal or Square. Technically they don't even have to send ANYTHING to the IRS unless you had more than 25k in gross receipts. 

They might get an inquiry from the IRS if you were to be audited, I have no idea of either of their obligation to furnish any mileage info to the IRS on demand.

You need to be keeping track of your own miles with date, odometer readings and business purpose. 

If all you deduct are your app on miles, you're potentially leaving 1000s on the table as trips to get car washes, maintenance, etc. All count as well.


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## Flarpy (Apr 17, 2016)

Null said:


> I think you're misunderstanding the deduction.


I don't think so 



> You can deduct for business related miles. If your INTENTION is not to transport passengers and just have an app on or do so while getting groceries, that doesn't count as a business purpose. Your intent plays a big part in the legitimacy of the deduction. Legitimacy and what you can probably get away with are two different things, as you seem to allude to.


I understand that. Keep in mind that the IRS can and does use statistics to determine intent. If it determines that your annual reported income is way below what "normal" profit-making businesses of the same type as yours make for the same number of expenses as you claim, they'll simply disallow a certain number of deductions and, if you disagree, you have 90 days to sue them in tax court. Most people won't.



> No, Uber and Lyft do NOT report to the IRS how many miles you were app on.


I do understand that  When I said "report" I meant _to the user_, not to the IRS.



> *Technically they don't even have to send ANYTHING to the IRS unless you had more than 25k in gross receipts.*


 *Please cite your source for this. I'm not familiar with this law or IRS regulation.*



> They might get an inquiry from the IRS if you were to be audited, I have no idea of either of their obligation to furnish any mileage info to the IRS on demand.


The IRS wouldn't bother. They'd simply disallow the deductions and bill you for the difference with a "notice of deficiency." If you want to contest the matter you have 90 days after that to sue the IRS and have a tax court decide the matter. If you miss that deadline, you have to pay the disputed amount and sue them in Federal District court.



> You need to be keeping track of your own miles with date, odometer readings and business purpose.


Technically that's true. Though I'm sure many people simply wait for Lyft's end-of-year mileage statement.



> If all you deduct are your app on miles, you're potentially leaving 1000s on the table as trips to get car washes, maintenance, etc. All count as well.


That's a fair point and I agree, though I'm not a tax attorney and would advise anyone writing off those miles (and maintenance, etc) get advice from one before doing so. Especially if the car is driven both for Uber/Lyft and personal use.


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## Null (Oct 6, 2015)

https://www.irs.gov/businesses/understanding-your-1099-k

I misreported the reporting threshold. It's 20k and 200 transactions. Last year Uber voluntarily issued 1099ks for all partners, regardless of amounts processed. Lyft sticks to the minimum (I didn't get a 1099k from Lyft last year).

And if you want to see it in IRS-Speak. Section 6050w of the tax code.

https://www.law.cornell.edu/uscode/text/26/6050W#


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## Flarpy (Apr 17, 2016)

Thank you very much for looking that up. It's surprising that Uber sends those out for _any _amount, since $20,000 is the _minimum _reporting threshold.

EDIT: Looking at the reg itself, I guess "minimum" is in regard to _mandatory _reporting. Anything under is indeed optional.


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