# Don't Hire an Accountant, Use TurboTax



## Markbrla

I have been a contractor/freelancer/small business owner for 17 years. Here is my advice for the upcoming tax season:

- If you have a full or part-time job as an employee (W2) then you would file your taxes as normal and add a schedule showing that you are ALSO an Uber driver, or sole proprietor (1099).

- If you only worked for Uber in 2014 you are a sole proprietor (1099).

- As a sole proprietor you are actually still classified by the IRS as an individual... they are the same. So, you could say that as an Uber driver you are filing your taxes as an individual; or, you are filing as a sole proprietor. They are the same.

- As an individual/ sole proprietor earning money as a contractor you can file your taxes once a year (dues April 15). Although, the IRS recommends that you file quarterly.

- As an individual/ sole proprietor the IRS recommends that you pay taxes quarterly. This is not mandatory. It becomes mandatory next year if you fail to pay your taxes on-time.

- As an individual/ sole proprietor you will have to pay a self-employment tax in addition to an income tax.

- Über will send you a 1099MISC sometime in January. You will need the information on the form to file your taxes.

- If you deduct mileage and expenses you should owe very little tax (unless you have done well as an Uber driver). For example, lets say you only deduct mileage at the current IRS rate (.56.5). After Uber's 20% cut you brought home $25,000 in 2014. You drove 40,000 miles in 2014. 40,000 x .56.5 = $22,600. Subtract $22,600 from $25,000. You owe taxes on income of $2,400. After other deductions (for example, car washes) you should come out owing nothing in this scenario.

- Avoid ref flags that might lead to an audit. For example, do not try and deduct new rims that you bought for your car. Haircuts, cologne, or anything that you know in your gut is a "silly" deduction. Do not use different numbers than what your 1099MISC from Uber states. If there is a discrepancy you will need to contact Uber. For example, your records indicated earnings of $10,000 but Uber's statement says $13,000. Do not file. Correct the problem
first.

- When you sell your car you can state a loss. If you lose $5,000 and you use your car $20% of the time as an Uber driver you can deduct $1,000. TurboTax will help you here.

- TurboTax is very easy. It will guide you along.

- If you owe taxes and can not pay ask for an extension. It's a simple form to fill out. You must do this by April 15.

- If you can not pay your taxes even with an extension then ask for an installment agreement. You will pay your taxes over the course of an agreed upon plan (for example, $100/month for 2 years).


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## Long time Nyc cab driver

Markbrla said:


> I have been a contractor/freelancer/small business owner for 17 years. Here is my advice for the upcoming tax season:
> 
> - If you have a full or part-time job as an employee (W2) then you would file your taxes as normal and add a schedule showing that you are ALSO an Uber driver, or sole proprietor (1099).
> 
> - If you only worked for Uber in 2014 you are a sole-proprietor (1099).
> 
> - As a sole proprietor you can file your taxes once a year (dues April 15). Although, the IRS recommends that you file quarterly.
> 
> - As a sole proprietor the IRS recommends that you pay taxes quarterly. This is not mandatory. It becomes mandatory next year if you fail to pay your taxes on-time.
> 
> - As a sole proprietor you will have to pay a self-employment tax in addition to an income tax.
> 
> - Über will send you a 1099MISC sometime in January. You will need the information on the form to file your taxes.
> 
> - If you deduct mileage and expenses you should owe very little tax (unless you have done well as an Uber driver). For example, lets say you only deduct mileage at the current IRS rate (.56.5). After Uber's 20% cut you brought home $25,000 in 2014. You drove 40,000 miles in 2014. 40,000 x .56.5 = $22,600. Subtract $22,600 from $25,000. You owe taxes on income of $2,400. After other deductions (for example, car washes) you should come out owing nothing in this scenario.
> 
> - Avoid ref flags that might lead to an audit. For example, do not try and deduct new rims that you bought for your car. Haircuts, cologne, or anything that you know in your gut is a "silly" deduction. Do not use different numbers than what your 1099MISC from Uber states. If there is a discrepancy you will need to contact Uber. For example, your records indicated earnings of $10,000 but Uber's statement says $13,000. Do not file. Correct the problem
> first.
> 
> - When you sell your car you can state a loss. If you lose $5,000 and you use your car $20% of the time as an Uber driver you can deduct $1,000. TurboTax will help you here.
> 
> - TurboTax is very easy. It will guide you along.
> 
> - If you owe taxes and can not pay ask for an extension. It's a simple form to fill out. You must do this by April 15.
> 
> - If you can not pay your taxes even with an extension then ask for an installment agreement. You will pay your taxes over the course of an agreed upon plan (for example, $100/month for 2 years).


TurboTax costs about the same as going to H&R Block. Don't get me wrong, it's good, it's basically the same thing as H&R Block does.


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## Markbrla

In my experience, H&R Block does not maximize your deductions. That's why I switched to TurboTax. The H&R people were too conservative.


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## Long time Nyc cab driver

Markbrla said:


> In my experience, H&R Block does not maximize your deductions. That's why I switched to TurboTax. The H&R people were too conservative.


Maybe because if they mess up they have to represent you with the IRS, that's their big sales pitch.


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## Oscar Levant

You are right. I used TT and my taxes were pretty small. But, having a low stated income isn't that great for credit, either. But, that income is the truth, and the fact is, we are not making much money, folks, but you already knew that  
OL


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## taarbo

how does it work if filing jointly with spouse


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## Long time Nyc cab driver

taarbo said:


> how does it work if filing jointly with spouse


TurboTax is pretty sophisticated, you can do a joint return.


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## Moofish

For TurboTax, in order to get the help with the schedule C for business deductions, you need the Personal Home & Business edition which is $100 retail. How much going to HR Block in person? HR Block also has their own software which is a lot less than Turbo Tax too, anyone have experience with their software?


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## CowboyMC

This year Turbotax is getting greety. They have increased the levels of product. I would use H&R Block deluxe software.


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## elelegido

Turbotax says of its software:

*Rated 4.6 out of 5 stars by our customers*

Does this mean that it may be deactivated at any moment


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## Bart McCoy

i was wondering about taxes. with the deduction and the low pay rates, cant believe people would be paying a lot in taxes

i guess if you're in the highest paid markets, and averaging $30/hr, then you did well and may be paying a bit


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## jsixis

been using turbo tax for over 2 decades, well worth the investment.
Take you time explore the options, here in Ohio they have one of the nastiest state income tax rules, plus every little city wants their cut too but turbo tax handles that.


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## cybertec69

Moofish said:


> For TurboTax, in order to get the help with the schedule C for business deductions, you need the Personal Home & Business edition which is $100 retail. How much going to HR Block in person? HR Block also has their own software which is a lot less than Turbo Tax too, anyone have experience with their software?


The TT Personal Home & Business edition cost me $70, cheaper than last year, where my CPA charged me $500.


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## Tristan Zier

These are incorrect:



Markbrla said:


> - If you have a full or part-time job as an employee (W2) then you would file your taxes as normal and add a schedule showing that you are ALSO an Uber driver, or sole proprietor (1099).
> - If you only worked for Uber in 2014 you are a sole proprietor (1099).
> - As an individual/ sole proprietor earning money as a contractor you can file your taxes once a year (dues April 15). Although, the IRS recommends that you file quarterly.
> - As an individual/ sole proprietor the IRS recommends that you pay taxes quarterly. This is not mandatory. It becomes mandatory next year if you fail to pay your taxes on-time.
> - Über will send you a 1099MISC sometime in January. You will need the information on the form to file your taxes.
> - When you sell your car you can state a loss. If you lose $5,000 and you use your car $20% of the time as an Uber driver you can deduct $1,000. TurboTax will help you here.


1. You do not "file" a 1099. The 1099 is a form the company sends to you and the IRS for your and their records. You will not actually send in any 1099's to the IRS. You will send in other forms, like a Schedule C and Schedule SE.
2. You are a sole proprietor by default for any 1099 work even if you had other jobs. If you had W-2 income, you have employee income. If you also have 1099 income, you also have sole proprietor income. You could also be something else for your driving services business too, such as an LLC if you formed yourself as one.
3/4. You are required to pay estimated quarterly taxes if you expect to owe more than $1,000 in taxes for the year, and will face penalties if you do not.
5. Uber may not send you a 1099-MISC. 
6. This is not as easy as you make it out to be. A lot of things get factored in, like calculating the fair value of the car, how much depreciation you've taken, etc. I would not recommend anyone use this as it is a very complicated tax strategy that won't have much payoff for Uber drivers.


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## Felix Kander

Markbrla said:


> In my experience, H&R Block does not maximize your deductions. That's why I switched to TurboTax. The H&R people were too conservative.


I've been using an app called Stride Drive to track my mileage and expenses which makes using turbotax a lot easier. Also tried one called MileIQ to track just mileage but it costs money..


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## UberTaxPro

Markbrla said:


> In my experience, H&R Block does not maximize your deductions. That's why I switched to TurboTax. The H&R people were too conservative.


I wouldn't suggest using a box tax store like H&R Block. If you can't do them yourself go to someone licensed like:
1. CPA that specializes in tax matters(not all do)
2. Enrolled Agent(look for the E.A. designation-does only taxes)


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## Stevie G

Markbrla said:


> I have been a contractor/freelancer/small business owner for 17 years. Here is my advice for the upcoming tax season:
> 
> - If you have a full or part-time job as an employee (W2) then you would file your taxes as normal and add a schedule showing that you are ALSO an Uber driver, or sole proprietor (1099).
> 
> - If you only worked for Uber in 2014 you are a sole proprietor (1099).
> 
> - As a sole proprietor you are actually still classified by the IRS as an individual... they are the same. So, you could say that as an Uber driver you are filing your taxes as an individual; or, you are filing as a sole proprietor. They are the same.
> 
> - As an individual/ sole proprietor earning money as a contractor you can file your taxes once a year (dues April 15). Although, the IRS recommends that you file quarterly.
> 
> - As an individual/ sole proprietor the IRS recommends that you pay taxes quarterly. This is not mandatory. It becomes mandatory next year if you fail to pay your taxes on-time.
> 
> - As an individual/ sole proprietor you will have to pay a self-employment tax in addition to an income tax.
> 
> - Über will send you a 1099MISC sometime in January. You will need the information on the form to file your taxes.
> 
> - If you deduct mileage and expenses you should owe very little tax (unless you have done well as an Uber driver). For example, lets say you only deduct mileage at the current IRS rate (.56.5). After Uber's 20% cut you brought home $25,000 in 2014. You drove 40,000 miles in 2014. 40,000 x .56.5 = $22,600. Subtract $22,600 from $25,000. You owe taxes on income of $2,400. After other deductions (for example, car washes) you should come out owing nothing in this scenario.
> 
> - Avoid ref flags that might lead to an audit. For example, do not try and deduct new rims that you bought for your car. Haircuts, cologne, or anything that you know in your gut is a "silly" deduction. Do not use different numbers than what your 1099MISC from Uber states. If there is a discrepancy you will need to contact Uber. For example, your records indicated earnings of $10,000 but Uber's statement says $13,000. Do not file. Correct the problem
> first.
> 
> - When you sell your car you can state a loss. If you lose $5,000 and you use your car $20% of the time as an Uber driver you can deduct $1,000. TurboTax will help you here.
> 
> - TurboTax is very easy. It will guide you along.
> 
> - If you owe taxes and can not pay ask for an extension. It's a simple form to fill out. You must do this by April 15.
> 
> - If you can not pay your taxes even with an extension then ask for an installment agreement. You will pay your taxes over the course of an agreed upon plan (for example, $100/month for 2 years).


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## Stevie G

When deducting miles, it is the actual miles with a passenger, or from the time you open the app, including driving to the passenger?
Thanks and Happy Thanksgiving..
Steve


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## UberTaxPro

Stevie G said:


> When deducting miles, it is the actual miles with a passenger, or from the time you open the app, including driving to the passenger?
> Thanks and Happy Thanksgiving..
> Steve


All business miles are deductible. To me this means when your app is on and you're ready to accept pings. Happy Thanksgiving to you also!


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## docswife

I was deactivated because of a crack in my windshield and Uber would not reactivate unless I replace the windshield. Is the cost of the replacement a tax deduction?


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## StarzykCPA

docswife said:


> I was deactivated because of a crack in my windshield and Uber would not reactivate unless I replace the windshield. Is the cost of the replacement a tax deduction?


A portion of the cost would be deductible if you use the actual expense method. If you use the standard mileage rate (which most do), then unfortunately, no, you cannot deduct it.


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## CowboyMC

Markbrla said:


> In my experience, H&R Block does not maximize your deductions. That's why I switched to TurboTax. The H&R people were too conservative.


H&R Block has a maximum tax prep fee refund. If they fail to get you the max refund allowed by law, they will refund the tax prep fee. When you go to H&R Block always ask for someone who is an enrolled agent. They have all levels of experience in the offices and you want to get an experienced tax professional.


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## William1964

I've used TurboTax for a while. This will be my first time using it with a 1099 income. I also have employer income.

I can't believe I had 8335 personal miles so far


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## Atlwarrior

Turbo Tax seems to draw the IRS attention for audits. No thank you.


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## prosidius

Is there any cheaper tax software? I just started driving for Uber and at the end of this year I'll probably only have made about $200. I'd be looking at over $100 to use TurboTax (since only their most expensive product supports schedule c).


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## SafeT

H&R office charged me $300 a few years ago just for a simple 1099. Try to find a cheaper place if you can. Make sure to ask what they charge for adding the 1099 to your tax return.


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## UberTaxPro

prosidius said:


> Is there any cheaper tax software? I just started driving for Uber and at the end of this year I'll probably only have made about $200. I'd be looking at over $100 to use TurboTax (since only their most expensive product supports schedule c).


First make sure you even have to file before spending money on tax software!
You have to file an income tax return if your net earnings from self-employment were *$400 *or more. Of course there are other factors like maybe you also have a real job or business or you may be able to claim tax credits etc..


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## UberTaxPro

Atlwarrior said:


> Turbo Tax seems to draw the IRS attention for audits. No thank you.


Just curious why do you think that? Because of the issues they had with some states?


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## gman

prosidius said:


> Is there any cheaper tax software? I just started driving for Uber and at the end of this year I'll probably only have made about $200. I'd be looking at over $100 to use TurboTax (since only their most expensive product supports schedule c).


I've been using TaxAct for a while now and it handled all my 1099 businesses just fine. For about $16.


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## Tula Dave

gman said:


> I've been using TaxAct for a while now and it handled all my 1099 businesses just fine. For about $16.


I also switched from Turbo Tax to TaxAct several years ago. Haven't looked back.


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## Older Chauffeur

Turbotax took some heat over eliminating Schedule C from their standard package for the 2014 tax year. They rectified the issue, making it available in time to file. Perhaps they won't be so greedy this year.

Edit: As I posted in other tax threads, I got TT Deluxe for $39 at Costco, and it includes Schedule C. No need to go to a higher priced product.


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## makinthemagic

Moofish said:


> For TurboTax, in order to get the help with the schedule C for business deductions, you need the Personal Home & Business edition which is $100 retail. How much going to HR Block in person? HR Block also has their own software which is a lot less than Turbo Tax too, anyone have experience with their software?


I worked at Block one season many years ago. Even then a schedule C would cost at least $75-100. I have no idea what it is now but I'm guessing significantly more. If you know what you are doing, self-service software is your best bet. I do my personal tax and a friend's small business return on Block's software.


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## UberTaxPro

makinthemagic said:


> I worked at Block one season many years ago. Even then a schedule C would cost at least $75-100. I have no idea what it is now but I'm guessing significantly more. If you know what you are doing, self-service software is your best bet. I do my personal tax and a friend's small business return on Block's software.


I wonder if anyone anywhere does their taxes by hand without a computer anymore? Can't beat the price....free!


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