# Cab drivers don't pay taxes?



## Urbanappalachian (Dec 11, 2016)

It's mostly cash transactions. That's how they get around it. With uber and lyft there's a record how much you made. Do uber and lyft report earnings to the IRS? I wonder if tips and bonuses count as "earnings"? It's not like I worked for it per se but was " given" to me. If someone gave you $1 million, would you really tell uncle Sam?


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## Blatherskite (Nov 30, 2016)

If I convert my income to Monopoly money and exchange it back later for dollars, does Parker Bros. have to issue me a 1099?


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## UberTaxPro (Oct 3, 2014)

Blatherskite said:


> If I convert my income to Monopoly money and exchange it back later for dollars, does Parker Bros. have to issue me a 1099?


Only if you have a capital gain on Park Place!



Urbanappalachian said:


> It's mostly cash transactions. That's how they get around it. With uber and lyft there's a record how much you made. Do uber and lyft report earnings to the IRS? I wonder if tips and bonuses count as "earnings"? It's not like I worked for it per se but was " given" to me. If someone gave you $1 million, would you really tell uncle Sam?


Uncle Sam has a relative named "Big Brother". Big Bro tells the Uncle everything now, so Uncle Sam will already know about your million!


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## SEAL Team 5 (Dec 19, 2015)

Urbanappalachian said:


> Do uber and lyft report earnings to the IRS? I wonder if tips and bonuses count as "earnings"?


Don't worry about it. Uber and Lyft love their driving partners so much that they'll pay your burden of tax. That little white computer sheet you get every year around the beginning of February with the numbers 1099 in the upper right hand corner is just for your convenience. You can use the back side as scratch paper for when your mother-in-law calls to give you her new phone number.

View rideshare as compensated hitch hiking. I mean you're basically only charging gas money. And when you see a letter from the IRS marked urgent in red with the words levy, lien or attachment written you can use that as fire staring material the next time you go camping.


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

Urbanappalachian said:


> It's mostly cash transactions. That's how they get around it. With uber and lyft there's a record how much you made. Do uber and lyft report earnings to the IRS? I wonder if tips and bonuses count as "earnings"? It's not like I worked for it per se but was " given" to me. If someone gave you $1 million, would you really tell uncle Sam?


This WAS how things were done until credit card machines made their way into taxis. That's been over a decade.

Many cities around the country have requirements for credit card processors.

However the reality is that these days about half of the revenue ends up being on credit/ house accounts (same deal as credit)

ALSO, if the IRS were to audit me they could audit my METER (if i was an owner operator) or my meter records with the cab company. All modern meters (from about 1980 or so) track how much revenue you bring in. Conversely the meter could be used by me to verify my income.

This was put into effect 30 some years ago because... surprise surprise... taxi drivers USED TO do this.

So yes technically you are correct, however at most I can shave maybe $20-30 a day in revenue, maybe as much as $50. However this requires getting cash tips or customers who trust me not to run the meter on them.. This is NOT the majority.

So realistically it lowers my tax burden from $150 a day to $100-120.

So take about $250 per day in revenue, shave $100 of that for expenses, and maybe $20-30 most of the time and that's still half.

that's down to $120 a day if i'm trying hard in taxable income.

This is a pretty large reduction BUT most of it is expenses...and it's a heck of a lot more than an uber drivers $0.000 in taxable income that is generated in most markets.

However i DO NOT do this because social security benefits require that you actually pay taxes, also my Credit rating is improved by higher levels of income.


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## SEAL Team 5 (Dec 19, 2015)

Stevie The magic Unicorn said:


> So yes technically you are correct, however at most I can shave maybe $20-30 a day in revenue, maybe as much as $50. However this requires getting cash tips or customers who trust me not to run the meter on them.. This is NOT the majority.
> However i DO NOT do this because social security benefits require that you actually pay taxes, also my Credit rating is improved by higher levels of income.


Very well said. I've been in the livery business for over 18 years and I too have about a 50% ratio of cash fares. Now, I don't have a meter, but the mileage is easily configured to dollars. Sure, we can skim up to 20% but as you said Social Security and credit ratings are very important.


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## Older Chauffeur (Oct 16, 2014)

I had a client several years ago who told me how, as a business owner, she had complained to her accountant about his insistence that she pay the max in social security/Medicare taxes. But once she was retired and realized her benefits were based on what she had earned and paid on, she was very pleased with his advice.


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

Older Chauffeur said:


> I had a client several years ago who told me how, as a business owner, she had complained to her accountant about his insistence that she pay the max in social security/Medicare taxes. But once she was retired and realized her benefits were based on what she had earned and paid on, she was very pleased with his advice.


I've considered just upping my income for the purposes of increasing my social security payouts later, but honestly with my VA disability check i'm less worried down the road.


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## Urbanappalachian (Dec 11, 2016)

That is if you live to see your social security peanuts!



Stevie The magic Unicorn said:


> I've considered just upping my income for the purposes of increasing my social security payouts later, but honestly with my VA disability check i'm less worried down the road.


Some sleaze cab companies do not use a credit card system for whatever reason (some could be stolen cards). These new cards that do not require you to put in a pin or a zip code is rather sketchy (I guess they call it a chip card?).

Other business owners I've known who pay their employees cash usually pretty much just report whatever earnings they feel like reporting that will give them "just" enough credit to be able to get a loan (mortgage, vehicle, etc.) as long as uncle Sam gets "something" so he won't have to be asking you for $.

There was a bartender I knew who would pull in $300 daily on weekends all day, she said she doesn't know how to file taxes because she doesn't get anything in the mail. I told her file as an independent contractor and report what you can report regarding earnings so that way you can show to loaners that you at least have VERIFIABLE income (so she can get a car or a house someday!). Plus the whole retirement thing, etc.



Stevie The magic Unicorn said:


> This WAS how things were done until credit card machines made their way into taxis. That's been over a decade.
> 
> Many cities around the country have requirements for credit card processors.
> 
> ...


Whats?



Blatherskite said:


> If I convert my income to Monopoly money and exchange it back later for dollars, does Parker Bros. have to issue me a 1099?


which department does Big Bro belong in? CIA?



UberTaxPro said:


> Only if you have a capital gain on Park Place!
> 
> Uncle Sam has a relative named "Big Brother". Big Bro tells the Uncle everything now, so Uncle Sam will already know about your million!


Is that right?



SEAL Team 5 said:


> Don't worry about it. Uber and Lyft love their driving partners so much that they'll pay your burden of tax. That little white computer sheet you get every year around the beginning of February with the numbers 1099 in the upper right hand corner is just for your convenience. You can use the back side as scratch paper for when your mother-in-law calls to give you her new phone number.
> 
> View rideshare as compensated hitch hiking. I mean you're basically only charging gas money. And when you see a letter from the IRS marked urgent in red with the words levy, lien or attachment written you can use that as fire staring material the next time you go camping.


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

Also... didn't mention this yet...

I had $30,000 in TAXABLE income driving a taxi last year, this was after all deductions/expenses.

Most weeks i only drove 3 shifts a week. (But for convention season I drove 5 shifts a week and the summer i drove 4 for tourist money and all)


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