# Uber IRS is Hobby



## Jimmy44 (Jan 12, 2020)

With the reduction of surge and promotions there will be thousands of drivers endering little, no or negative income. Will they eventually take away IC deductions and list it as a hobby ?


----------



## Jon Stoppable (Dec 11, 2019)

You can have tax losses every year so long as the activity is run in a businesslike manner, and there is either an actual economic gain or reasonable expectation of future gain. Real estate is a good example of that.

For RS, the standard mileage deduction creates a tax loss where there is (I hope) actually an economic gain because your actual costs are much lower than the standard rate. That not your fault, so the IRS can't disallow the loss for that reason. They would have to change their regulations to change that result, which is a long, difficult, and very public process.


----------



## Jimmy44 (Jan 12, 2020)

Jon Stoppable said:


> You can have tax losses every year so long as the activity is run in a businesslike manner, and there is either an actual economic gain or reasonable expectation of future gain. Real estate is a good example of that.
> 
> For RS, the standard mileage deduction creates a tax loss where there is (I hope) actually an economic gain because your actual costs are much lower than the standard rate. That not your fault, so the IRS can't disallow the loss for that reason. They would have to change their regulations to change that result, which is a long, difficult, and very public process.


Outstanding reply very informative and easy to follow. My Prius has 277,000 miles on it and I won't feel that until I trade it in. A lot of my earnings are earmarked for a new car. Delayed depreciation.


----------



## 25rides7daysaweek (Nov 20, 2017)

Jimmy44 said:


> With the reduction of surge and promotions there will be thousands of drivers endering little, no or negative income. Will they eventually take away IC deductions and list it as a hobby ?


Idt they are going to let the ones 
that are making a living doing it 
stop paying taxes 
so that would be a for sure NO..


----------



## Jimmy44 (Jan 12, 2020)

25rides7daysaweek said:


> Idt they are going to let the ones
> that are making a living doing it
> stop paying taxes
> so that would be a for sure NO..


They would still pay taxes.


----------



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

Jimmy44 said:


> Outstanding reply very informative and easy to follow. My Prius has 277,000 miles on it and I won't feel that until I trade it in. A lot of my earnings are earmarked for a new car. Delayed depreciation.


When i was an owner/operator cabbie I put the difference between the Standard mileage rate and gasoline/toll cost into my "expenses other than gasoline and or a new car" savings account.

Once the car was toast i had $30,000 in it....
Sold the car for less than $500 minus the cost to tow it to the scrap yard from the toyota shop.

More than the cost of a new car but not by much. Problem is you can't be putting $50-70 a day into a savings account when you only make $100.


----------



## FLKeys (Dec 27, 2018)

Stevie The magic Unicorn said:


> When i was an owner/operator cabbie I put the difference between the Standard mileage rate and gasoline/toll cost into my "expenses other than gasoline and or a new car" savings account.
> 
> Once the car was toast i had $30,000 in it....
> Sold the car for less than $500 minus the cost to tow it to the scrap yard from the toyota shop.
> ...


I do similar, I know what my car costs me per mile including depreciation and estimated future repairs. I take my total weekly miles, including personal miles and multiply that by my cost per mile and that money goes into an account for future repairs and future vehicle replacement.

I am willing to bet there is a very small percentage of people driving Uber/Lyft that do this. Most of the drivers I know are cashing out daily just to meet daily life needs. They rely on Uber to exist. I'm just thankful that I am not in that position.


----------



## Jimmy44 (Jan 12, 2020)

FLKeys said:


> I do similar, I know what my car costs me per mile including depreciation and estimated future repairs. I take my total weekly miles, including personal miles and multiply that by my cost per mile and that money goes into an account for future repairs and future vehicle replacement.
> 
> I am willing to bet there is a very small percentage of people driving Uber/Lyft that do this. Most of the drivers I know are cashing out daily just to meet daily life needs. They rely on Uber to exist. I'm just thankful that I am not in that position.


At some point your going to pay for all the miles. I figure a blown head gasket is 4 to 5 thousand.


----------



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

Jimmy44 said:


> At some point your going to pay for all the miles. I figure a blown head gasket is 4 to 5 thousand.


When i gave up on my sienna the LIST of major repairs i needed got to the point where i just told them to stop and let me clean my stuff out, and get it towed to the scrap yard.

At a certain point a car isn't worth putting money into, it's vital that you pay it off _long_ before you hit that point.

And with uber paying what it does these days, your not making enough money to be able to squirrel away $100s a week you need to be putting away.

I mean for you folks, what's your plan for coming up with even $1000 for repairs? That's not even a lot, $1000 is really easy to hit these days.

And REALITY, you need to be doing a 36 month loan. _Yes 36 months_... not 48, not 60, 36!

A 36 month loan on a 25,000 car is $700 a month. So not even a super high end car here, and your at $700 a month!


----------



## [email protected] (Feb 10, 2020)

Stevie The magic Unicorn said:


> A 36 month loan on a 25,000 car is $700 a month. So not even a super high end car here, and your at $700 a month!


And that's with ZERO interest! &#128521;


----------



## FLKeys (Dec 27, 2018)

I look at car loans a little different, if I do have to take one out I get the longest terms possible, think my last one was 7 years. However I have never taken more than 2.5 years to pay off a car. I just like having the smaller payment to fall back to in case some thing happens. You know an emergency back up. My last car loan I kept getting monthly statements saying no payment due until XX/XX/XX sometime several years from now, I just kept sending my inflated payment every month.

About 15 years ago when I was out of work by choice for 6 months it sure was nice to have a smaller payment to fall back on.


----------



## [email protected] (Feb 10, 2020)

FLKeys said:


> I look at car loans a little different, if I do have to take one out I get the longest terms possible, think my last one was 7 years. However I have never taken more than 2.5 years to pay off a car. I just like having the smaller payment to fall back to in case some thing happens. You know an emergency back up. My last car loan I kept getting monthly statements saying no payment due until XX/XX/XX sometime several years from now, I just kept sending my inflated payment every month.
> 
> About 15 years ago when I was out of work by choice for 6 months it sure was nice to have a smaller payment to fall back on.


I'm with you - I do the exact same thing! One caveat, though...the longest term without compromising a low interest rate. They do sometimes increase the rate if the loan is over five years (but not always). &#128513;


----------



## Jimmy44 (Jan 12, 2020)

FLKeys said:


> I look at car loans a little different, if I do have to take one out I get the longest terms possible, think my last one was 7 years. However I have never taken more than 2.5 years to pay off a car. I just like having the smaller payment to fall back to in case some thing happens. You know an emergency back up. My last car loan I kept getting monthly statements saying no payment due until XX/XX/XX sometime several years from now, I just kept sending my inflated payment every month.
> 
> About 15 years ago when I was out of work by choice for 6 months it sure was nice to have a smaller payment to fall back on.


If you don't have a payment book how do you make extra payments. I financed a used Jeep and paid it off early. But that loan had the booklet so it was easy.


----------



## FLKeys (Dec 27, 2018)

Jimmy44 said:


> If you don't have a payment book how do you make extra payments. I financed a used Jeep and paid it off early. But that loan had the booklet so it was easy.


I will not accept a loan that does not let me make free online payments. Those banks that use payment booklets and no online payments just try to maximize the amount of interest they are making off a loan. The later the payment gets to them the more interest they make.


----------



## [email protected] (Feb 10, 2020)

FLKeys said:


> I will not accept a loan that does not let me make free online payments. Those banks that use payment booklets and no online payments just try to maximize the amount of interest they are making off a loan. The later the payment gets to them the more interest they make.


Last car I bought that had a booklet was purchased in 2000. I didn't even know that was still a thing... &#129315;


----------



## FLKeys (Dec 27, 2018)

[email protected] said:


> Last car I bought that had a booklet was purchased in 2000. I didn't even know that was still a thing... &#129315;


Yes, it is still a thing from what I hear. Suntrust in Florida still does it or did as of about 4 years ago when a family member financed a car with them.


----------



## 197438 (Mar 7, 2020)

Stevie The magic Unicorn said:


> When i gave up on my sienna the LIST of major repairs i needed got to the point where i just told them to stop and let me clean my stuff out, and get it towed to the scrap yard.
> 
> At a certain point a car isn't worth putting money into, it's vital that you pay it off _long_ before you hit that point.
> 
> ...


Silliness. I average $1100/week deposited into my bank account by Uber ($40/wk of that is toll reimbursement), and my monthly cost of living is $740/week. That includes rent, utilities, insurance for my RS car and my personal car, loan payments for personal car, health insurance, fuel and phone. My wife covers food, clothing, and her own health insurance. I put 10% of my gross earnings into a savings account and 10% into a Roth IRA. I'm left with $100/week to spilt between me and the IRS. My wife's savings grows faster than mine because I pay the vast majority of our living expenses (women may want equal pay but they don't want to share expenses equally), and we are planning to retire at 59.5 when we can access our IRA savings. Then we will move to Mexico and live on the beach with $4000/month of dividend income. The key to success is to never have kids.


----------

