# Tax Attorney Here - Ask Away



## UberPissed

Hey there, former driver / tax attorney offering to answer general questions - looks like a lot of them have been already answered. Before you cast judgments about my competency, I work for legal aid, which is why I used to drive part time. Still skeptical? Then I would take the Bill Burr approach and GFY.

And like any good tax attorney, I'm also giving you my circular 230 disclaimer, which is that any advice or info contained in this or subsequent communiction is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.


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## BayArea Lyft Driver

Is it worth doing quarterly taxes or wait till end of the year and file all together?


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## UberPissed

You don't have to do them quarterly, just make estimated payments. If you don't you will typically have a small penalty. But if your income is nominal, you will be ok. Last year, I just increased my withholding from work, and it alleviated me from making quarterly payments.


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## UberPissed

But keep meticulous records - learn how to do your own taxes. The industry profits off of peoples acceptance that it's too hard to learn. Nobody knows your own business like yourself. Try using myfreetaxes.com if your income is under 60k. You can efile for free there. 100% free. No bullshit.


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## BayArea Lyft Driver

UberPissed said:


> You don't have to do them quarterly, just make estimated payments. If you don't you will typically have a small penalty. But if your income is nominal, you will be ok. Last year, I just increased my withholding from work, and it alleviated me from making quarterly payments.


Do I contact the IRS for the paperwork when it comes to quarterly payments? Once I send the payment in, do they send me back a receipt or something documenting the fact that I Paid that money to them?


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## UberPissed

You would need to submit payments through the vouchers on form 1040ES:

www.irs.gov/pub/irs-pdf/f*1040es*.pdf

There is also a way that you can do it electronically. You would need to keep track yourself. You can get an account transcript, which will show you the account activity over the year, but you shoudl be able to keep track of four payments.


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## ptnutr

If i set up an LLC S corp here in NJ where i live but i operate in ny as a independent contractor for uber/lyft do i pay ny tax and get credit in nj for the income earned in ny?


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## jason_womack

I'm confused over the mileage deduction, I owe $380 federal and $90 state is what my accountant told me. I drove a little over 4000 miles which comes out to a little over $4000 at 55 cents a mile. Why is it that I still owe? At 15% of my earnings I figured on owing about $800.

$800 is the figure TaxSlayer said I owed before entering the mileage deduction, after entering the deduction it said I still owed.

Is there something that I am missing or is this correct?


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## UberTaxPro

ptnutr said:


> If i set up an LLC S corp here in NJ where i live but i operate in ny as a independent contractor for uber/lyft do i pay ny tax and get credit in nj for the income earned in ny?


There is no such thing as an "LLC S corp". Its either LLC or S corp. Did you mean LLC or S corp? @UberPissed


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## UberTaxPro

jason_womack said:


> I'm confused over the mileage deduction, I owe $380 federal and $90 state is what my accountant told me. I drove a little over 4000 miles which comes out to a little over $4000 at 55 cents a mile. Why is it that I still owe? At 15% of my earnings I figured on owing about $800.
> 
> $800 is the figure TaxSlayer said I owed before entering the mileage deduction, after entering the deduction it said I still owed.
> 
> Is there something that I am missing or is this correct?


Its 56 cents per mile for 2014. .56 x 4000= $2240


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## jason_womack

Sorry I meant 7000 miles


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## elelegido

> Then I would take the Bill Burr approach and GFY.


I would like to tell the IRS to gfy. What advice would you give on the best way to do this? Must it be in writing or is there an electronic means?


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## TittySprinkles

UberPissed said:


> Hey there, former driver / tax attorney offering to answer general questions - looks like a lot of them have been already answered. Before you cast judgments about my competency, I work for legal aid, which is why I used to drive part time. Still skeptical? Then I would take the Bill Burr approach and GFY.
> 
> And like any good tax attorney, I'm also giving you my circular 230 disclaimer, which is that any advice or info contained in this or subsequent communiction is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.


Before starting Uber/Lyft I had a normal job which took out taxes before I got paid. Should I file that W-2 separately?


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## amp man

UberPissed said:


> Hey there, former driver / tax attorney offering to answer general questions - looks like a lot of them have been already answered. Before you cast judgments about my competency, I work for legal aid, which is why I used to drive part time. Still skeptical? Then I would take the Bill Burr approach and GFY.
> 
> And like any good tax attorney, I'm also giving you my circular 230 disclaimer, which is that any advice or info contained in this or subsequent communiction is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.


On my Uber Summary page, there is a "possible deductions" section. Under that includes $3500.00 Uber fees. Do I really have to pay taxes on the fees they take? Please tell me no.
Thanks


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## 3for3

Hey all, I started Uber about mid jan 15 and have yet to establish a "DBA" or a separate bank account with a EIN or what ever. The second quarter is fast approaching and I wasn't logging my miles properly but have almost all my gas receipts for the quarter plus a couple of tire repairs and a oil change or two. I have miscellaneous stuff like water, gum, car detailing or car wash receipts as well. i read somewhere that I can't deduct mileage and fuel so it has to be one or the other and i guess fuel would go under expenses if my mileage is too jacked to account for?? IDK, looking for some advice/

1. What is my best coarse of action for the Jan-Mar quarter?

2. What should be my immediate course of action for second quarter?


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## ReviTULize

Open a separate checking account and do all business related stuff through it. Get a software that automatically downloads transactions and has a mobile app. In your down time, you can categorize your spending. Some softwares even have mileage tracking, but I use TripLog. It automatically turns on when I plug in and drive over 5mph. At the end of the year you're set. I have rental property and two businesses and can't imagine doing it any other way.


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## UberTaxPro

DenverDiane said:


> Nice catch
> 
> Because it's always a good idea to get tax advice from anonymous internet sources who claim to be "professionals"
> I know because I am the current President of the American Bar association. If you don't believe me then just GFY (because that's what professionals say don't'cha know)


I've been to those BAR Association meetings........


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## Dr Gelakeiwicz

to the OP

Re: 1099-K - what is the requirement for issuance? Do you have to be a bank? A third party processor _*to*_ the bank? Does Uber have that ability/authority to process the transactions as a "third party" directly with the bank or do they use a processor?

Or are they now also re-writing IRS Code with the issuance this year of 1099-K instead of 1099-MISC for independent contractors. ?

Thanks for any insight or discussion of the difference between the 1099-K and 1099-MISC


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## uberThere

So Denver Diane is passing herself off as someone with tax experience? 
Proceed at your own risk.


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## James Geller

What IRS job description/code are you using on the self-employment form for an Uber X driver?


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## TittySprinkles

How much did everyone pay their H&R accountant for tax help? Just curious. Also, do we even need to use a tax accountant? I drove like 5,000 miles and grossed around $7,500 between Uber & Lyft. Any suggestions?


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## UberPissed

If you are somewhat savvy, I would suggest using myfreetaxes.com. Assuming everything else is simple, you should be able to file a Schedule C-EZ if your expenses are under 5k.


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## UberPissed

SORRY! Catching UP:



ptnutr said:


> If i set up an LLC S corp here in NJ where i live but i operate in ny as a independent contractor for uber/lyft do i pay ny tax and get credit in nj for the income earned in ny?


I don't operate out that way, but most states want you to allocate the income where it was earned, regardless of where you are incorporated. However, if you pay state tax in one state, you get credit for it in the other. E.g., if you have a person earning income in NY and IL. IL taxes you on the total income, but on Line 10 of the IL 1040 you will get a credit for income tax paid to another state. That number is pulled from a Schedule CR, where you allocate the IL and non-IL portion. Then there is a calculation where you determine the percentage of IL and non-IL income, and you are able to claim the lesser of what you paid to the other state, or the amount of state taxes multiplied by the percentage in the Schedule CR. It's not that complicated if you have software that will let you do it, but you will probably need to see an accountant or tax professional.



jason_womack said:


> I'm confused over the mileage deduction, I owe $380 federal and $90 state is what my accountant told me. I drove a little over 4000 miles which comes out to a little over $4000 at 55 cents a mile. Why is it that I still owe? At 15% of my earnings I figured on owing about $800.
> 
> $800 is the figure TaxSlayer said I owed before entering the mileage deduction, after entering the deduction it said I still owed.
> 
> Is there something that I am missing or is this correct?


You may have qualified for other credits, like the EITC. Generally, your first 10k is untaxed (due to standard deduction and exemption, assuming a single filer with no dependents). Net profit is going to be subject to self-employment tax of 15.3%. 1/2 of that is given back to you as an above the line deduction (page 1 of the 1040). Does that help?



UberTaxPro said:


> There is no such thing as an "LLC S corp". Its either LLC or S corp. Did you mean LLC or S corp? @UberPissed


S Corp, C Corp, LLC, some states recognize other types of quasi-S Corp LLCs. To be honest, it doesn't matter. In fact, Schedule C is probably the way to go, as it will eliminate your need for corporate returns, reduce your tax prep bill (may even make it so you can do it yourself). Most people are overly eager to incorporate to protect personal assets; however, most people don't have assets to protect in the first place, and many states recognize pass-through entities like an S Corp as having the same protections as a Sole Prop or LLC (none, essentially).



UberTaxPro said:


> Its 56 cents per mile for 2014. .56 x 4000= $2240


Correct.



TittySprinkles said:


> Before starting Uber/Lyft I had a normal job which took out taxes before I got paid. Should I file that W-2 separately?


I don't know what you are talking about. All income, from wherever source derived should go on your return in the year that you earned it. Different rules for people who don't use the cash method (accrual) which is probably nobody on this forum.



amp man said:


> On my Uber Summary page, there is a "possible deductions" section. Under that includes $3500.00 Uber fees. Do I really have to pay taxes on the fees they take? Please tell me no.
> Thanks


Not 100% how the 1099-K reports the income. I believe Uber reports the SRF as a payment and a deduction on your pay statement. If it's included in the 1099-K, then you certainly want to deduct it, but my understanding is that the 1099-K reports the payments made - the payment would already include the deduction (or it should, but we have known better to trust UBER).



3for3 said:


> Hey all, I started Uber about mid jan 15 and have yet to establish a "DBA" or a separate bank account with a EIN or what ever. The second quarter is fast approaching and I wasn't logging my miles properly but have almost all my gas receipts for the quarter plus a couple of tire repairs and a oil change or two. I have miscellaneous stuff like water, gum, car detailing or car wash receipts as well. i read somewhere that I can't deduct mileage and fuel so it has to be one or the other and i guess fuel would go under expenses if my mileage is too jacked to account for?? IDK, looking for some advice/
> 
> 1. What is my best coarse of action for the Jan-Mar quarter?
> 
> 2. What should be my immediate course of action for second quarter?


Your best "coarse" of action is tricky. There are special rules for standard mileage rate v. actual expenses. Read PUB 463 on the matter. I would try to create a reconstruction of your mileage for 1Q 2015, based on trips made, and the amount of dead miles you usually have. From this point on, get a mileage log. Make sure you can account for all of your miles.

It's too hard to tell you what your first quarter payment is without knowing how much income you are earning, and other sources. Rule of thumb - 15.3% of your net profit plus whatever you need for income taxes. If your total income is 20k or less, you can probably withhold another 8-10%, and if you are making over that, look at the marginal tax tables to figure it out.



Dr Gelakeiwicz said:


> to the OP
> 
> Re: 1099-K - what is the requirement for issuance? Do you have to be a bank? A third party processor _*to*_ the bank? Does Uber have that ability/authority to process the transactions as a "third party" directly with the bank or do they use a processor?
> 
> Or are they now also re-writing IRS Code with the issuance this year of 1099-K instead of 1099-MISC for independent contractors. ?
> 
> Thanks for any insight or discussion of the difference between the 1099-K and 1099-MISC


1099-K is issued by anyone who is processing payments. I think this is a result of the shadow economies of Ebay and Amazon, where most transactions were going under the radar. I don't know off hand if there is a rule of doing 1099-K v. 1099-Misc, but the end result is the same, you still have to report the income.



James Geller said:


> What IRS job description/code are you using on the self-employment form for an Uber X driver?


I would probably go with 485300, which is the code for taxi/limo. This is used internally for the audit technique guides. In other words, a rideshare driver may have significant mileage, while a freelance artist may have more in supplies, equipment, etc. I believe this is used when obtaining your DIF score. I won't go into that here, since its too long to type, too much to read, and doesn't add much value to the thread anyway (google DIF or Discriminant Function System if you want more info).

SORRY FOR THE DELAY!


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## TittySprinkles

I didn't keep track of my mileage, should I whip up a log before I head to h&r? I don't want to pay someone $200 but I feel like I'll miss something huge If I dont. My mileage was around 5,000 and my gross income was around $7,500 between uber & lyft. Any idea what I'd be paying? Any suggestions welcome


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## prdelnik666

UberPissed said:


> Hey there, former driver / tax attorney offering to answer general questions - looks like a lot of them have been already answered. Before you cast judgments about my competency, I work for legal aid, which is why I used to drive part time. Still skeptical? Then I would take the Bill Burr approach and GFY.
> 
> And like any good tax attorney, I'm also giving you my circular 230 disclaimer, which is that any advice or info contained in this or subsequent communiction is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.


Thank you for your time. I would also like to know why is my income inflated by Uber's fees and the safe ride fees? I know i can deduct those (how nice) but wod like to know whats their reason to add them to drivers income in the first place?


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## UberTaxPro

TittySprinkles said:


> I didn't keep track of my mileage, should I whip up a log before I head to h&r? I don't want to pay someone $200 but I feel like I'll miss something huge If I dont. My mileage was around 5,000 and my gross income was around $7,500 between uber & lyft. Any idea what I'd be paying? Any suggestions welcome


the only thing you'll miss is $200 if you do!


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## UberTaxPro

UberPissed said:


> SORRY! Catching UP:
> S Corp, C Corp, LLC, some states recognize other types of quasi-S Corp LLCs. To be honest, it doesn't matter. In fact, Schedule C is probably the way to go, as it will eliminate your need for corporate returns, reduce your tax prep bill (may even make it so you can do it yourself). Most people are overly eager to incorporate to protect personal assets; however, most people don't have assets to protect in the first place, and many states recognize pass-through entities like an S Corp as having the same protections as a Sole Prop or LLC (none, essentially).


Going Schedule C saves time and money. A person with substantial assets can purchase lots of insurance for protection and go Schedule C. If someone starts hiring drivers, then the extra layer of protection from a C Corp might be nice.....you never know what someone else is going to do.


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## UberPissed

TittySprinkles said:


> I didn't keep track of my mileage, should I whip up a log before I head to h&r? I don't want to pay someone $200 but I feel like I'll miss something huge If I dont. My mileage was around 5,000 and my gross income was around $7,500 between uber & lyft. Any idea what I'd be paying? Any suggestions welcome


I say yes, with the proviso that "whip up" means to make a reconstruction based on the trips you have made and a good faith estimate of other mileage through some other verifiable means - such as mileage reports on oil change records, etc. If your mileage was 5,000 and there were no other expenses, you would have a gross profit of 4675, resulting in self employment tax of $715, of which you would be able to take 1/2 of that as an above the line deduction, but if you had no other income, it wouldn't give you a tax benefit since you won't end up having any taxable income (income tax, not SEP tax).


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## EaglesFan

This may be a stupid question but I started driving the day before New Years Eve in 2014 and got my first pay check in 2015. So I'm assuming I don't owe taxes for 2014 since it's when you get paid not when you earned the money, right? This would explain why I didn't get any documents from uber?


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## UberPissed

EaglesFan said:


> This may be a stupid question but I started driving the day before New Years Eve in 2014 and got my first pay check in 2015. So I'm assuming I don't owe taxes for 2014 since it's when you get paid not when you earned the money, right? This would explain why I didn't get any documents from uber?


Generally it's considered income when the check is issued. You don't have constructive receipt of the funds until Razier pays you.

You may also not have received documents because the income you earned was less than the amount necessary for the payor (UBER) to be required to issue anything (1099-Misc is $600, not sure on a 1099-K).


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## EmraldArcher

So I was thinking of clever ways to frame this but I'll just come out and ask.

If I choose to claim my vehicle is used solely for my business (Uber) and deduct every single mile I drive in a year how could the IRS prove I was lying? Since miles driven whenever you're online with the app are deductible and there is no way to prove or disprove whether I was online short of getting a court order for Uber's records it seems it would be impossible.

Now I would never dream of lying on my taxes of course, the question simply came to me as I was pondering whether I could deduct miles driven to go shopping/see a movie/whatever if I was online during the trip there and back.

Also, is the amount shown in box 1a of the 1099-K inclusive of the 20% Uber takes or is that already deducted from that amount? If it does include the 20% should I multiple the amount in 1a by .8 before adding it to my return?


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## Kevin Faaborg

I'm using my cell phone to take pictures of my trip odometer every day that I drive for Uber/Lyft (my second job). I set it to zero either at home or the park and ride and get the pics when I get home or stop for food on the way home. I then use the pictures to enter the numbers into SherpaShare and an Excel file I maintain, so I think I have the contemporaneous record thing set up. I have questions about mileage deductions. 1. Is all mileage between calls deductible? 2. Is the mileage incurred after the first ping deductible or does the deduction start when I pick up the fare? 3. My place of business for my Uber/Lyft driving is home, since I do my record keeping there. Does that mean that I can deduct miles from home (or the park and ride lot) to the mall, where I sit and wait for a fare? 4. Is mileage from the last fare to home deductible?


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## Cleveland Josh

The only miles I don't log as deductible are the miles from my last drop off to home.


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## gman

Cleveland Josh said:


> The only miles I don't log as deductible are the miles from my last drop off to home.


Why not? Assuming you started from home to Uber then you should be able to deduct miles to get back home regardless if you're online or not. You would not have been away from home were it not for your uber job, so I don't see why those miles wouldn't be deductible.


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## Lidman

TittySprinkles said:


> How much did everyone pay their H&R accountant for tax help? Just curious. Also, do we even need to use a tax accountant? I drove like 5,000 miles and grossed around $7,500 between Uber & Lyft. Any suggestions?


 I paid roughly about hmmm lets seeee somewhere in the neighborhood of zero.


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## Cleveland Josh

I don't actually know the rules, can we get clarification from someone who knows tax laws better?


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## CowboyMC

UberTaxPro said:


> There is no such thing as an "LLC S corp". Its either LLC or S corp. Did you mean LLC or S corp? @UberPissed


Here is how an LLC S-corp comes into being. I person formed a LLC in NJ. Can do this online at NJ Treasury website. Then fills out an IRS form stating that for tax purposes he wants to be considered an S-corp. An Uber driver would be a single person LLC.


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## UberTaxPro

CowboyMC said:


> Here is how an LLC S-corp comes into being. I person formed a LLC in NJ. Can do this online at NJ Treasury website. Then fills out an IRS form stating that for tax purposes he wants to be considered an S-corp. An Uber driver would be a single person LLC.


An LLC can file form 8832 and "elect" to be treated as a corporation then file form 2553 to elect s-corp for federal tax purposes. My point was there is no entity selection you can make when forming a business called "LLC S corp". An LLC electing to be treated as a S corp is still an LLC not an LLC- s corp. Depending on elections made by the LLC, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC's owner's tax return ( a "disregarded entity").
If no 8832 election is made the single member LLC will be taxed as a "disregarded entity". An LLC with at least 2 members will be taxed as a partnership if no 8832 election is made.


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## UberTaxPro

Cleveland Josh said:


> I don't actually know the rules, can we get clarification from someone who knows tax laws better?


@EmraldArcher @Kevin Faaborg ....Its a grey area for now. The IRS will probably clarify what they expect for Uber mileage logs soon if they haven't already. For now there seems to be a 3 schools of thought:
1. Start milage at first pickup (or ping for some). end mileage after last dropoff.
2. whenever app is on record mileage.
3. only milage reported by Uber app is recorded ( 0 dead mileage allowed )

Pick your poison! Or ask your tax professional


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## UberTaxPro

EmraldArcher said:


> So I was thinking of clever ways to frame this but I'll just come out and ask.
> 
> If I choose to claim my vehicle is used solely for my business (Uber) and deduct every single mile I drive in a year how could the IRS prove I was lying? Since miles driven whenever you're online with the app are deductible and there is no way to prove or disprove whether I was online short of getting a court order for Uber's records it seems it would be impossible.
> 
> Now I would never dream of lying on my taxes of course, the question simply came to me as I was pondering whether I could deduct miles driven to go shopping/see a movie/whatever if I was online during the trip there and back.
> 
> Also, is the amount shown in box 1a of the 1099-K inclusive of the 20% Uber takes or is that already deducted from that amount? If it does include the 20% should I multiple the amount in 1a by .8 before adding it to my return?


question # 1, A lot of people believe that if the IRS can't prove something you'll be OK. Unfortunately, it doesn't work that way....you have to prove things to the IRS! You have to follow their rules. The only way you can prove to them that it was 100% business is with a mileage log. Again, its your burden to prove it to them should they ask. You could use your vehicle 100% of the time for work but with no contemporaneous mileage log ALL YOUR MILES MAY BE DISALLOWED. https://www.mileiq.com/articles/mileage-logs
http://www.inman.com/2014/04/21/rea...-mileage-deduction-into-a-negligence-penalty/
http://www.whiteheadcpa.com/2011/10/no-mileage-log-no-deduction/

question # 2, my 1099 K was inclusive of Uber's 20%. You should check yours against your weekly statements to see if yours is. If it is, no don't do the .8 multiplying thing. Include it all on your schedule C, then deduct the Uber commission as a business expense on your schedule C


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## gman

UberTaxPro said:


> @EmraldArcher @Kevin Faaborg ....Its a grey area for now. The IRS will probably clarify what they expect for Uber mileage logs soon if they haven't already. For now there seems to be a 3 schools of thought:
> 1. Start milage at first pickup (or ping for some). end mileage after last dropoff.
> 2. whenever app is on record mileage.
> 3. only milage reported by Uber app is recorded ( 0 dead mileage allowed )
> 
> Pick your poison! Or ask your tax professional


I go to school 4. Start mileage when leaving home base to Uber, end mileage when back at home base. If I end up 50 miles from where I started due to Uber, you can bet I'm going to write off the miles to get back home, assuming no personal business in between.


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## UberTaxPro

gman said:


> I go to school 4. Start mileage when leaving home base to Uber, end mileage when back at home base. If I end up 50 miles from where I started due to Uber, you can bet I'm going to write off the miles to get back home, assuming no personal business in between.


 Here in CT I get pings going to NY quite often. CT uber drivers can't pick up in NY so I have to ride back 40-60 miles dead head every time I go to NY. I log those dead miles returning to CT everytime. How about this?...4. Record all business miles related to Uber. 
You might want to establish a home office and deduct it on your tax return, it might help to justify the "business miles" when you leave your house. Otherwise the IRS might call the miles from your house to the first ping commuter miles which are not deductible. Leaving from your office can be deductible. Leaving from your house might be considered commuter miles and not deductible.


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## CowboyMC

UberTaxPro said:


> You might want to establish a home office and deduct it on your tax return, it might help to justify the "business miles" when you leave your house. Otherwise the IRS might call the miles from your house to the first ping commuter miles which are not deductible. Leaving from your office can be deductible. Leaving from your house might be considered commuter miles and not deductible.


I drive from my home to my staging area, my home. My staging area is where I position myself to get calls. Some people prefer a train station, etc.


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## UberTaxPro

CowboyMC said:


> I drive from my home to my staging area, my home. My staging area is where I position myself to get calls. Some people prefer a train station, etc.


so you drive from your home to your home? Do you ever get pings at your staging area(home)?


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## DrJeecheroo

CowboyMC said:


> I drive from my home to my staging area, my home. My staging area is where I position myself to get calls. Some people prefer a train station, etc.


train station is not bad, though I think it works better for cabs, since they can just flag available cabs waiting


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## iUber2015

UberPissed said:


> Hey there, former driver / tax attorney offering to answer general questions - looks like a lot of them have been already answered. Before you cast judgments about my competency, I work for legal aid, which is why I used to drive part time. Still skeptical? Then I would take the Bill Burr approach and GFY.
> 
> And like any good tax attorney, I'm also giving you my circular 230 disclaimer, which is that any advice or info contained in this or subsequent communiction is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.


Hi James:

You may be just the expert that can answer this for me.

My salary is $100,000 at my full-time job. I claim O for tax exemptions. I have no dependents, I normally don't itemize...have a few hundred dollars in donations a year that's about it.

I also drive for UBER and LYFT on the side. I can confidently estimate I receive (based on what I am comfortable driving currently) about $325/week or $14-17,000/year in fares (incld tips) a year. I won't itemize gas receipts or car washes, etc just the mileage deduction.

So, I would like to make it as easy as possible for tax purposes and do not want to end up paying at the end of the year, nor want the gov holding too much of my money for the year either.

Based on my estimated additional $14-17k/year of Uber/Lyft driving, how much in additional taxes should I have my full time employer withhold on my paychecks? Federal and State (Wisconsin).

Thank you!


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## Shadowfax

I use a super simple google form to log miles. Select beginning or ending mileage, enter your odometer reading, and submit. Everything is logged to a google docs spreadsheet. This seems like the most simple solution to me, doesn't require any manual manipulation until tax time. Easy to access on your mobile device without moving from your dash mount.


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## ARIV005

Shadowfax said:


> I use a super simple google form to log miles. Select beginning or ending mileage, enter your odometer reading, and submit. Everything is logged to a google docs spreadsheet. This seems like the most simple solution to me, doesn't require any manual manipulation until tax time. Easy to access on your mobile device without moving from your dash mount.


I like your Durango. Is that the 5.7 or the 3.6? Looks like the R/T, but don't know if you switched the rims.


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## Shadowfax

R/T stock rims. Thanks.


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## UberPissed

iUber2015

I guess my first question is why you make $100,000 and drive for uber 

At any rate - If you are single, and don't itemize, and don't have any adjustments, then your taxable income would be 93,800, and your tax before withholdings would be $18,341.

I can't fully answer your question, since I don't know what your net profit is on those fares. PS, you could take both car wash and standard mileage expense (not gas though).

Let's just assume you have a 25% profit margin, so your 17,000 income is really $4,250 in self employment income. Your tax is 19,433 and your self employment tax is 601 for a total of 20,034 (or an increase of about 1,700. Assuming your profit margin is 50%, and your income is 8,500, then the total tax would be 21,740, or an increase of $3,399. Assuming you get paid 2x per month, you would want an extra $142 taken out for federal taxes. State taxes should be easy - not subject to self-employment tax, and I believe WI is a flat rate.


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## SBDayton

UberPissed said:


> Hey there, former driver / tax attorney offering to answer general questions - looks like a lot of them have been already answered. Before you cast judgments about my competency, I work for legal aid, which is why I used to drive part time. Still skeptical? Then I would take the Bill Burr approach and GFY.
> 
> And like any good tax attorney, I'm also giving you my circular 230 disclaimer, which is that any advice or info contained in this or subsequent communiction is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.


Okay - I'm in my third week driving, and I think I have a handle on this self-employment tax thing so far. What I'm wondering about is the standard vs. actual method of claiming mileage as a business expense. If I use the standard mileage deduction, does that mean I can't claim any other business expenses at all, or that I just can't itemize additional car-related items (fuel, washes, cleaning supplies, maintenance, repairs, insurance, etc)?

I'm buying a Chromebook solely for the business. I can claim that in 'Office Expenses" in addition the standard mileage deduction, right? Along with a percentage of my cell phone/data plan bill (in accordance with business usage) in "Other Expenses"? I can still claim 50% of the snacks/water/goodies I provide to my riders too, in "Meals and Expenses", correct?

Sorry if this seems like a silly question - I just want to be a sure as possible. Thanks for this great offer of advice!


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## UberPissed

Some quick notes - If using mileage - keep CONTEMPORANEOUS record - mileage in and out every day you drive. Use something else to periodically verify the accuracy. (e.g., an oil change receipt will verify mileage on a specific date).

If you use standard, you can't claim most expenses, but you could claim parking, tolls, and I also believe car washes. 

The chromebook is questionable. The IRS may argue it's dual purpose or more personal than business, and may prevent you claiming a deduction on it. There are rules for depreciating tangible property over its lifetime, but for simplicity, i would accelerate the deprecation and claim it all in the year you buy it.

The snacks i would categorize NOT as meals. Put it in as supplies or other expenses. The meals will be subject to a 50% writedown. For Uber drivers, nobody should really be deducting meals. I wont explain here, but look in the rules, it's just not really applicable for us.

The phone is tricky too. The IRS would say that you would have a phone regardless of whether you are driving, and could prevent the deduction alltogether. My approach is to deduct the amount that exceeds the basic phone plan (e..g, if you have a $50/m data plan, you can argue the data is for the device). 

GOOD LUCK.

Parting shot - regardless of what you do, keep good records, keep them organized. It doesn't matter what you deduct if you don't have adequate substantiation.


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## Benjamin Goldburd

Hello....

I am new to this site and feeling glad to be a part of this discussion.


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## Robinhood

Much appreciated Pissed!


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## Mike Miller

Can I write off my car purchase that I use for performing Uber duties?


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## Jayme Proctor

Although, many kinds of software are easily available that can help in keeping an eye on your expenses and the taxes paid. Still, seeking help from one of the income tax lawyers can easily help you understand your tax settlement options.


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## bryanch

I've been driving for a short time and I've been keeping meticulous mileage records, including start/end addresses for each fare, as well as mileage records for dead head miles between trips. Is there a way to send these records directly to the IRS with my return? If so, would that be a good thing to reduce a chance of audit, or would that be a red flag to them that I'm trying too hard to keep them from looking into things? My father was recently audited for his small business. Everything was on the up and up, and the audit came back with no issues, but the stress of going through it nearly killed him anyways. If I can help keep that from happening, just by sending in records I already have, I'd be happy to do that.


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## Amsoil Uber Connect

No don't even do that.
Learn how to use M soft Excel and make a couple spreed sheets. That track your fares and mileage.
Uber does most of it, now just add total miles driven for the day. Usually its 2:1. 2 deadhead miles to 1, bad days are like 3:1. Now at the end of the year you already have total miles driven.

Knowledge is power, also read www.losthorizons.com


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## Amsoil Uber Connect

elelegido said:


> I would like to tell the IRS to gfy. What advice would you give on the best way to do this? Must it be in writing or is there an electronic means?


You can do like Snoopy did and write them asking to be taken off there mailing list.

However send in a Freedom of Information Act request and get a copy of your master file and form 23c showing there assessments over the last 5 years. 3 is good enough but since it's free, may as well get some return on your money.

Oh but you Voluntarily Self Assessed yourself and signed away your right to be secure in your papers and such. Umm,... good luck with that.


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## Elevy

NJ driver here with a few questions.

I stated driving for uber July 3rd and I have not tracked any expenses or miles but I know I should.

If I open my app in my home town and drive to another one where I expect to find work do I count that as miles for uber driving?

I do have a full time job that always takes out too much for taxes so I get a refund but this year I am getting married in Nov so my filing status will change either to married jointly or married individual.


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## Amsoil Uber Connect

Yes.

A married person filing as an individual is the same as being single.


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## Muskogee Man

So I live 30miles from my Tulsa market. Can I count my miles to and from my market on my taxes?


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## Amsoil Uber Connect

I would say yes. As long as the app is on when you leave the house.

I went to OC yesterday to visit a friend then uber after
, an extra 100 miles. It was a good day too. Net 108 in 2 1/2 hrs. not counting 2hr to and from. Its not an everyday thing for me. Maybe let the tax pro give a definitive answer but seems mia?


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## ReviTULize

I pickup a pack of gum and pay for it with my business debit card. Bingo...miles to and from grocery are now at .58/mile!! It's not much...but it adds up over the year.


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## UberNorthStar

"People HATE to give you information...but they LOVE to prove you wrong!"

Amen to that! (Off Topic, I know.)


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## Elevy

If I want to hire a CPA in NJ how do I find one. Is there a service comparable to the BAR.


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## mls55

How do you apportion or allocation income to various states if you pick up in one and drop off in another. I drive in the Virginia, DC, Maryland area and many times will pick up in Virginia and drop off in DC and vice vesa. Since we are not employees, were we only would pay taxes in our state of residence as per reciprocity agreements between Virginia, Maryland and DC, we need to allocate income to where earned in each state. Would the income be allocated to where the pick up was or the use of some formula based upon distance in each state or district.


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## UberNorthStar

Pay in the state of residence. American Airlines pays in the State of Texas as it is based in Dallas-Fort Worth. United/ Continental is based in <Edit: Chicago> so they pay those taxes. I do not see airlines paying taxes in every state they service.

JM2¢W

Addition: This post was tired correctly the first time. UK (edited out) and Chicago are nowhere near being alike.


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## John121

John121 said:


> Hello UberPissed.
> I think you are the right person who can answer my simple query.
> What if the driver registered at UBER is different than the one who entering the banking information and receiving the direct deposit in his bank account. Like for example i register myself as a driver and enter my uncle/friend banking information and SSN and select sole proprietor under vault.uber. Who will receive the 1099 from UBER and who has to file the tax forms from the 2 people ?
> Thanks


Hello UberPissed.
I think you are the right person who can answer my simple query.
What if the driver registered at UBER is different than the one who entering the banking information and receiving the direct deposit in his bank account. Like for example i register myself as a driver and enter my uncle/friend banking information and SSN and select sole proprietor under vault.uber. Who will receive the 1099 from UBER and who has to file the tax forms from the 2 people ?
Thanks


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## UberNorthStar

My first thought is the bank will not deposit the check b/c the driver's name is not on the account.
You need to ask the bank.

<---------DISCLAIMER: _Not _a tax lawyer

My common sense says Uber may not accept your account info as stated above. The driver receives the 1099 form for his taxes.

You must want to be deactivated quickly, or you are horseing around.

I choose the second.


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## John121

John121 said:


> Hello UberPissed.
> I think you are the right person who can answer my simple query.
> What if the driver registered at UBER is different than the one who entering the banking information and receiving the direct deposit in his bank account. Like for example i register myself as a driver and enter my uncle/friend banking information and SSN and select sole proprietor under vault.uber. Who will receive the 1099 from UBER and who has to file the tax forms from the 2 people ?
> Thanks


Thanks for the reply.
Well i just went to local UBER office and they told me that you can actually write someone else name under the uber vault or banking information, like your spouse etc. And his/her bank account information. So s/he will receive the direct deposit.
But he was also of the same opinion that the driver will receive the 1099, but then he checked through their internal information and he confirmed me that the person whoes information will be shared under the vault will receive the 1099 and will be held responsible for the due taxes (if any), regardless of the fact hes the same person as driver or a different person.
So i just want to make sure, since many experts in the tax are here at this forum that who exactly will be taxed ?


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## UberNorthStar

John121 said:


> who exactly will be taxed ?


<---------DISCLAIMER: _Not _a_ tax lawyer_

The person who earned the money.is ultimately responsible for their taxes. Why don't you call.the IRS?


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## pizza guy

I place my Sunday paper in the pockets behinds the front seats. I love looking in the mirror and not being able to see them behind the paper. Is my newspaper subscription deductible?
If I renew Cooks Illustrated and place it back there is that deductable?


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## Edgard Bocio

If i average $1k per week , how much would i need to set aside for taxes


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## UberNorthStar

$1,000 x .153 = $153. 
<---------DISCLAIMER: _Not _a tax lawyer

You _did take out_ expenses first?


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## Edgard Bocio

UberNorthStar said:


> $1,000 x .153 = $153.
> <---------DISCLAIMER: _Not _a tax lawyer
> 
> You _did take out_ expenses first?


Not yet... so i multiply the earnings after expenses by .153


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## UberNorthStar

That's what I will do.
<---------DISCLAIMER: _Not _a tax lawyer

Gross income - deductions (expenses) = taxable income X .153 = amount to put away for taxes

You can look up forms on IRS.gov for people who are self- employed. Print them out & instructions & play around w/it.

JM2¢W


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## Davesway10

Are we responsible for paying taxes on the 20% that Uber takes off the top ?


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## Davesway10

Besides the .153 for federal aren't there also state taxes to take in to consideration ?


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## UberNorthStar

<---------DISCLAIMER:_Not _a tax lawyer


Davesway10 said:


> Are we responsible for paying taxes on the 20% that Uber takes off the top ?


No. You write that off as a deduction for "insurance payment to Uber."
Keep track of your SRF deductions. I will.be writing them off as "payment for use of Uber platform."

Watch the tolls. I see U is claiming mine as income & taking 20% for themselves. Those should be deductions for me.



Davesway10 said:


> Besides the .153 for federal aren't there also state taxes to take in to consideration ?


Should you live in a state w/state income tax, you are responsible for it. If memory serves me, I think that is a deduction on the federal form.

JM2¢W


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## StarzykCPA

Okay let me try and handle some of these.



mls55 said:


> How do you apportion or allocation income to various states if you pick up in one and drop off in another. I drive in the Virginia, DC, Maryland area and many times will pick up in Virginia and drop off in DC and vice vesa. Since we are not employees, were we only would pay taxes in our state of residence as per reciprocity agreements between Virginia, Maryland and DC, we need to allocate income to where earned in each state. Would the income be allocated to where the pick up was or the use of some formula based upon distance in each state or district.


Do your best to allocate mileage by state. It's not going to be exact (most likely), but it should be sufficient. Nonresident filing requirements vary by state. You may have to pay tax to nonresident states. Then you will get a credit for taxes paid to other states on your resident state tax return (because your resident state will tax 100% of the income anyways).



John121 said:


> Thanks for the reply.
> Well i just went to local UBER office and they told me that you can actually write someone else name under the uber vault or banking information, like your spouse etc. And his/her bank account information. So s/he will receive the direct deposit.
> But he was also of the same opinion that the driver will receive the 1099, but then he checked through their internal information and he confirmed me that the person whoes information will be shared under the vault will receive the 1099 and will be held responsible for the due taxes (if any), regardless of the fact hes the same person as driver or a different person.
> So i just want to make sure, since many experts in the tax are here at this forum that who exactly will be taxed ?
> 
> View attachment 10643





UberNorthStar said:


> <---------DISCLAIMER: _Not _a_ tax lawyer_
> 
> The person who earned the money.is ultimately responsible for their taxes. Why don't you call.the IRS?


The person who's SSN is attached to the income is responsible for the tax UNLESS: that person assigns the income to someone else (such as issuing them a 1099, also called nominee'ing the income). If they do this, they will report the income and deduct the full amount on their return. Then on the other person's return (the actual driver in this case), they will report the income in full on their return as if the payments were made directly to them to begin with. It's a little confusing.



pizza guy said:


> I place my Sunday paper in the pockets behinds the front seats. I love looking in the mirror and not being able to see them behind the paper. Is my newspaper subscription deductible?
> If I renew Cooks Illustrated and place it back there is that deductable?


If you are buying the paper and magazine subscription solely for your riders use and enjoyment, then yes you can deduct it. Otherwise, maybe you will be able to deduction a % depending on the business/personal usage.


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## StarzykCPA

Mike Miller said:


> Can I write off my car purchase that I use for performing Uber duties?


You can depreciate your car based on IRS limits. The amount you can deduct depends on the business vs personal usage (based on business vs personal miles driven).



Elevy said:


> If I want to hire a CPA in NJ how do I find one. Is there a service comparable to the BAR.


You can just do a google search for your local town if you want a local CPA. You can look at the state CPA society website for NJ, they typically have a listing. Or you search google for a CPA specializing in whatever you need (so long as you don't mind not meeting them in person, for instance).



Davesway10 said:


> Besides the .153 for federal aren't there also state taxes to take in to consideration ?


Yes, your state will tax you in the net income as well. You should be able to google for your state's income tax rate and use that. The federal 15.3% would be good in your in the 10% income tax bracket. If you expect to be in a higher bracket, you may want to consider setting aside more than that (or paying in estimates.)


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## UberRules?

What rules are applied towards deducting legal fees in the course of conducting my "Uber Driving Business"? Legal fees are listed as a deductible expenses on the Schedule C, is that correct? (Sorry, if this question was already asked. I just join the thread, and have not had a chance to read all of it.)


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## Cooluberdriver

UberTaxPro said:


> There is no such thing as an "LLC S corp". Its either LLC or S corp. Did you mean LLC or S corp? @UberPissed


Wrong. God I hate when ppl think they know what they are talking about. You can be both but you file an 1120s form at the end of the year. God man research stuff before just typing something.


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## UberNorthStar

UberRules? said:


> What rules are applied towards deducting legal fees in the course of conducting my "Uber Driving Business"? Legal fees are listed as a deductible expenses on the Schedule C, is that correct? (Sorry, if this question was already asked. I just join the thread, and have not had a chance to read all of it.)


Go to www.IRS.gov & printout the instructions for self-employed (non farm). There is a different form for self-employment. The results of it you transfer to the 1040 long form.


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## UberTaxPro

Cooluberdriver said:


> Wrong. God I hate when ppl think they know what they are talking about. You can be both but you file an 1120s form at the end of the year. God man research stuff before just typing something.


There is no such ENTITY as an "LLC S corp". You can be an LLC and choose to be taxed as an S corp but your still not an "LLC S corp" as the original poster believed. There is no state in the U.S. that allows you to form as an "LLC S corp". The discussion was about entity formation not tax status. I would suggest that you follow your own advice from the above post.


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## UberTaxPro

UberNorthStar said:


> Speaking to me, Pro? I have been filing the 1040 long form for 43 years. Downloaded the instructions for the self-employment form last week to see what has changed since the last download yrs ago. Estimated taxes this quarter are due Sept 15.
> 
> Post #88 brought IRS tax forms into the thread.


I was speaking solely to Cooluberdriver. post #7 (quoted by Cooluberdriver) #9, 38 and # 37 Nothing to do with you Star. Not sure what you mean by post 88? This is post #88


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## LAuberX

I can't afford health insurance after Sept 30th.... What is the penalty for not having it three months?


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## UberTaxPro

LAuberX said:


> I can't afford health insurance after Sept 30th.... What is the penalty for not having it three months?


You can find details here https://www.healthcare.gov/fees-exemptions/fee-for-not-being-covered/ There are also exemptions but *generally*:

*The fee for not having coverage in 2015*
If you don't have coverage in 2015, you'll pay the *higher* of these two amounts:
*
2% of your yearly household income.* (Only the amount of income above the tax filing threshold, about $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a Bronze plan.

*$325 per person for the year ($162.50 per child under 18).* The maximum penalty per family using this method is $975.


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## UberNorthStar

I'll delete my post now you.made it clear. I was directly above your post.


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## Lorenzo Rodriguez

just reading all this makes me want to stop uber this second, I havnt keep track of the miles. they didn't say anything about a quarterly irs file.


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## UberRules?

Lorenzo Rodriguez said:


> just reading all this makes me want to stop uber this second, I havnt keep track of the miles. they didn't say anything about a quarterly irs file.


I am not a IRS attorney, just a Tax Preparer for H&R block. First, go out and get a millage log book from a business supplies store (ex. Office Depot), they should have them, and start keeping track of your miles for when you are driving for your Uber business. You got that right. Second, from what I been taught, try to the best of your ability to re-create a daily log from your Uber trip history and your typical day of driving after started logging millage, beginning with the first day you start this year to when you starting keeping. I know its lot guess work, but if you can back it up, then the IRS will hopefully accept it, if audited. Finally, consult with a tax professional as soon as possible, about what records to keep and the best way to managed your. I put all automobile related expense on a debit or credit card, rather than trying to hold on to and organize everyone of your receipts. (Still, try to hold on to your receipts). If this seems like too much of hassle to be worth it, then expect to pay higher taxes than you need too. Stop Ubering may well be what's best for you.


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## Lorenzo Rodriguez

UberRules? said:


> I am not a IRS attorney, just a Tax Preparer for H&R block. First, go out and get a millage log book from a business supplies store (ex. Office Depot), they should have them, and start keeping track of your miles for when you are driving for your Uber business. You got that right. Second, from what I been taught, try to the best of your ability to re-create a daily log from your Uber trip history and your typical day of driving after started logging millage, beginning with the first day you start this year to when you starting keeping. I know its lot guess work, but if you can back it up, then the IRS will hopefully accept it, if audited. Finally, consult with a tax professional as soon as possible, about what records to keep and the best way to managed your. I put all automobile related expense on a debit or credit card, rather than trying to hold on to and organize everyone of your receipts. (Still, try to hold on to your receipts). If this seems like too much of hassle to be worth it, then expect to pay higher taxes than you need too. Stop Ubering may well be what's best for you.


i do know how to log miles and hours on a commercial driver log book as i already have a commercial license with hazmat endorsement for my current job . i didn't know that i should be keeping miles as the guys at uber did not mention it when i had my van inspected or anything about taxes. ill get my another log book and start logging all my drives from day one. i just started about 3 weeks ago so its not much to do. luckily the trip history shows the miles and minutes.


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## UberRules?

Lorenzo Rodriguez said:


> i do know how to log miles and hours on a commercial driver log book as i already have a commercial license with hazmat endorsement for my current job . i didn't know that i should be keeping miles as the guys at uber did not mention it when i had my van inspected or anything about taxes. ill get my another log book and start logging all my drives from day one. i just started about 3 weeks ago so its not much to do. luckily the trip history shows the miles and minutes.


Good. Uber at least should have told you that you are self-employed and in business for yourself, not an employee of Uber. (See your License Agreement) That means you have to pay your taxes directly - Federal, State and Local, Medicare and Social Security, they don't withhold taxes and provide you a W-2 at the end of the year like at your other job, Uber will send you a 1099. Like I said, you should talk to a tax professional. p.s. If it feels like you are being employed by Uber, well then that what it feels like.


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## StarzykCPA

UberRules? said:


> What rules are applied towards deducting legal fees in the course of conducting my "Uber Driving Business"? Legal fees are listed as a deductible expenses on the Schedule C, is that correct? (Sorry, if this question was already asked. I just join the thread, and have not had a chance to read all of it.)


I'm not sure what type of fees you paid, but you can deduct legal fees related to your Uber business on Schedule C. They would go on line 17 for "legal and professional services" expense. Something such as entity formation fees could go here.


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## UberRules?

StarzykCPA said:


> I'm not sure what type of fees you paid, but you can deduct legal fees related to your Uber business on Schedule C. They would go on line 17 for "legal and professional services" expense. Something such as entity formation fees could go here.


To be more specific, there is currently a very public lawsuit in California regarding the "employment" classification of Uber drivers. Are the fees, if any, payed by the plaintiffs, or Uber for that matter, deductible business related expenses for legal and professional services?


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## StarzykCPA

Yes, I believe they would be.


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## Another Uber Driver

StarzykCPA said:


> Okay let me try and handle some of these.
> 
> Do your best to allocate mileage by state. It's not going to be exact (most likely), but it should be sufficient. Nonresident filing requirements vary by state. You may have to pay tax to nonresident states. Then you will get a credit for taxes paid to other states on your resident state tax return (because your resident state will tax 100% of the income anyways).


In the District of Columbia, there is something usually referred to as the "Franchise Tax" which is a tax on all unincorporated businesses. D.C. classifies taxicabs and individually owned limousines as such. Thus, be the cab driver D.C. resident, or not, he must pay it. For years, D.C. did not enforce this on non-residents, but, after a squabble with the hot dog vendors, most of whom lived in the suburbs, which D.C. won, D.C. has started cracking down on this.

As far as cabs and limousines go, the Franchise Tax applies only to D.C. licenced and registered limousines. Out of state cabs and limousines that pick up in D.C. to transport back to their judisdiction of licensure under the terms of the Reciprocal Agreement and Interstate Compact of 1947 do not have to pay the Franchise Tax.

D.C. has made no attempt to collect a Franchise Tax from rideshare drivers who operate here. As these drivers are not covered under the aforementioned 1947 Agreement (Uber was not even science fiction material, at that point), it could be argued, and, it has been a complaint from taxi and limousine drivers, that the rideshare drivers should have to pay something for a Franchise Tax, as they are operating in D.C. Given what side controls D.C., I am surprised that they are not trying to collect some tax from the rideshare drivers.

Uber does pay a one per-cent tax on all rideshare trips that originate in D.C. that goes to a fund for accessible vehicles.

I am a D.C. resident. My accountant did report my UberX income (as well as my taxi income) on my D.C. Franchise Tax Return. He told me that while I did have to report to D.C., I did not have to report anything to Virginia. I was, at the time, operating UberX in Virginia, as well. I no longer operate in Virginia, so, until I can buy some proper insurance, that will not be a problem. I always have shied from operating in Maryland, as technically, Uber has resolved its problems with Maryland only with respect to Uber Black. Maryland, currently, is not doing anything against UberX, but that could change by administrative fiat. Maryland has some really funny tax laws respecting those who pay taxes to other states.



LAuberX said:


> I can't afford health insurance after Sept 30th.... What is the penalty for not having it three months?


This is why I call it the We Are Telling You That You Can Afford This "Health Care" Act. The only reason that I can pay for it is because I sold some property back in 2013. The money that came from that was supposed to supplement my Social Security, when it came time for me to receive that, but, since I am being told that I can afford this "health care" on my usual income, it must go for that, instead. On my usual income, I can not afford the premiums, I can not afford the deductibles and I can not afford the penalties.

Now, if I had only my usual income, and, decided to pay for the "health care" that I am being told that I can afford on my usual income, I would have to stop paying my mortgage. Once I was evicted and sleeping on a grate, I would get the "health care" for free. If I chose to pay my mortgage and not the premiums or the fines, the gubbamint would seize my house and send me to the grates where , again, I would get my "health care" for free.


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## UberRules?

Another Uber Driver said:


> In the District of Columbia, there is something usually referred to as the "Franchise Tax" which is a tax on all unincorporated businesses. D.C. classifies taxicabs and individually owned limousines as such. Thus, be the cab driver D.C. resident, or not, he must pay it. For years, D.C. did not enforce this on non-residents, but, after a squabble with the hot dog vendors, most of whom lived in the suburbs, which D.C. won, D.C. has started cracking down on this.
> 
> As far as cabs and limousines go, the Franchise Tax applies only to D.C. licenced and registered limousines. Out of state cabs and limousines that pick up in D.C. to transport back to their judisdiction of licensure under the terms of the Reciprocal Agreement and Interstate Compact of 1947 do not have to pay the Franchise Tax.
> 
> D.C. has made no attempt to collect a Franchise Tax from rideshare drivers who operate here. As these drivers are not covered under the aforementioned 1947 Agreement (Uber was not even science fiction material, at that point), it could be argued, and, it has been a complaint from taxi and limousine drivers, that the rideshare drivers should have to pay something for a Franchise Tax, as they are operating in D.C. Given what side controls D.C., I am surprised that they are not trying to collect some tax from the rideshare drivers.
> 
> Uber does pay a one per-cent tax on all rideshare trips that originate in D.C. that goes to a fund for accessible vehicles.
> 
> I am a D.C. resident. My accountant did report my UberX income (as well as my taxi income) on my D.C. Franchise Tax Return. He told me that while I did have to report to D.C., I did not have to report anything to Virginia. I was, at the time, operating UberX in Virginia, as well. I no longer operate in Virginia, so, until I can buy some proper insurance, that will not be a problem. I always have shied from operating in Maryland, as technically, Uber has resolved its problems with Maryland only with respect to Uber Black. Maryland, currently, is not doing anything against UberX, but that could change by administrative fiat. Maryland has some really funny tax laws respecting those who pay taxes to other states.
> 
> This is why I call it the We Are Telling You That You Can Afford This "Health Care" Act. The only reason that I can pay for it is because I sold some property back in 2013. The money that came from that was supposed to supplement my Social Security, when it came time for me to receive that, but, since I am being told that I can afford this "health care" on my usual income, it must go for that, instead. On my usual income, I can not afford the premiums, I can not afford the deductibles and I can not afford the penalties.
> 
> Now, if I had only my usual income, and, decided to pay for the "health care" that I am being told that I can afford on my usual income, I would have to stop paying my mortgage. Once I was evicted and sleeping on a grate, I would get the "health care" for free. If I chose to pay my mortgage and not the premiums or the fines, the gubbamint would seize my house and send me to the grates where , again, I would get my "health care" for free.


First of all, you didn't answer the contributor's question about the healthcare penalty. Second, I for one, as a self-employed person, can afford health insurance for the first time. Second, I can, for the first time, actually have access to health insurance, period. All because of the Affordable Care Act. It seems to me that if can not afford the current market-place health care premiums in your market now, you couldn't afford health insurance (and actually get coverage that protects you if you get sick and not drop your coverage) before the ACA. If I were you, I would look into applying for a market place policy and see if you qualify for a tax subsidy. I don't want you driving around without insurance, getting in to an accident, and ending up in the hospital, with me and other taxpayers/insurance rate payers giving you free medical treatment, while subsidizing your large mortgage that you probably could not afford in the first place.


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## Another Uber Driver

UberRules? said:


> *1. *First of all, you didn't answer the contributor's question about the healthcare penalty.
> 
> *2. *Second, I for one, as a self-employed person, can afford health insurance for the first time. Second, I can, for the first time, actually have access to health insurance, period. All because of the Affordable Care Act.
> 
> *3. *It seems to me that if can not afford the current market-place health care premiums in your market now, you couldn't afford health insurance (and actually get coverage that protects you if you get sick and not drop your coverage) before the ACA. If I were you, I would look into applying for a market place policy and see if you qualify for a tax subsidy.
> 
> *4. * I don't want you driving around without insurance, getting in to an accident, and ending up in the hospital, with me and other taxpayers/insurance rate payers giving you free medical treatment, while subsidizing your large mortgage that you probably could not afford in the first place.


1. I did not answer it, because I did not need to answer it nor am I qualified to answer it. The Tax Professional, who is qualified to answer it, and, is qualified to dispense tax advice answered it before I had ever read the post.

2. I am delighted that it is working for you. Its working for you does not mean that it works for everyone. It is not working for me.

3. I could not afford it before, I can not afford it now--not on my regular income, that is. In order to qualify for the tax subsidy, I must curtail my working hours to a point that they will not produce enough income to pay my bills. If I work enough hours to produce enough income to pay my bills, I am ineligible for the tax subsidy. If I do not get tax subsidies, I can not pay my bills, the premiums, the deductibles or the fines. If I can not work enough to pay my bills, I can get the tax subsidies, but I can not pay my other bills. I do not care what the gubbamint tells me that I can pay, the gubbamint does not see my balance sheet, so it does not know what I can or can not pay.

4. If you had taken the bother actually to read * and comprehend* what I posted, you would have learned that I did purchase the coverage. I can afford it only because I sold some property in 2013. Further, I can afford to keep my working hours curtailed and live partially from the proceeds of this sale, as well as pay the premiums and the deductibles. Thus, I can receive the tax subsidy, for now, at least. I did not want to use these funds for that. I wanted to invest them to supplement Social Security when I become eligible for full benefits at age sixty-seven. Instead of putting away this money, I must spend it. Why should I have to curtail my working hours to buy something that I can not afford? Why should I have to spend my later years in poverty because the gubbamint compelled me to spend my safety net money on something that I could not afford?

Not only does the gubbamint not see my balance sheet, you do not see it, either. Thus, you have no way of knowing whether I could afford my "large" mortgage "in the first place", or not. Please allow me to enlighten you. I bought this house several years before this compulsionist Nanny State Horror scam was foisted upon the American Public. I made the down payment with my own money; not yours, not my neighbours', not any taxpayer's. I have made the payments *to time, every month* since I bought it. I have *never been late with one payment.* I have made every payment with my own money; not yours, not my neighbours' not any taxpayer's. My mortgage is not "large", comparitively, that is. I am not living in a palace on Foxhall Road, in Spring Valley, Woodley Park or North Portal. I live in a mostly working class neighbourhood called Michigan Park. The houses here are duplex and triplex/semi-detached. *DO NOT TELL ME* that this is a "large" mortgage that I "could not afford in the first place". You are acting just like those Nanny State Liberals when you try to tell me what I can and can not afford, especially when neither they nor you know anything about me.

I pay my taxes, just like everyone else: property tax, income tax, franchise tax (D.C.). No one is subsidising me; marry, Sirrah, I am doing quite a bit of subsidising and I do not like it. I resent paying for this one or that one, for whom parents (in the root sense of the word, only) will not take any responsibility, to go to the dentist, when I can not afford to go myself. Why should I have to pay for someone else's problems before I pay for my own? I do not have to like it, 
Y-E-T, but making me like it is another thing on which these Nanny State Liberals are working.

Before you start to ASS-U-ME, you would do well to keep in mind what happens when you do that.


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## UberTaxPro

Cooluberdriver said:


> Wrong. God I hate when ppl think they know what they are talking about. You can be both but you file an 1120s form at the end of the year. God man research stuff before just typing something.


Here is a Forbes article explaining ENTITY formation: http://www.forbes.com/sites/kellyph...s-s-corps-and-pcs-choosing-a-business-entity/


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## Another Uber Driver

^^^^****Presses "HUH?" button****^^^^^^^^


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## SanFranLyfter

UberPissed Awesome thanks for doing this!

Do you know if I can expense an uber or lyft ride as a passenger if I took it as part of a TaskRabbit job? My argument is that I couldn't have done the job without taking the uber to get there and that if I were driving my car I'd have gotten the standard mileage rate?


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## JMBF831

Forgive my elementary understanding, but, in a nutshell:

I drove 460 miles so I get to deduct .57 ($262.20) from my "earnings" of $455. Therefore, my taxable income is:

$455 - $262.20 = $192.80 (and of that $192.80 I can expect to pay...18% ?

Is this how it works, basically?


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## StarzykCPA

Guess I will help out with these. Hope no one minds 



SanFranLyfter said:


> UberPissed Awesome thanks for doing this!
> 
> Do you know if I can expense an uber or lyft ride as a passenger if I took it as part of a TaskRabbit job? My argument is that I couldn't have done the job without taking the uber to get there and that if I were driving my car I'd have gotten the standard mileage rate?


Yes. This sounds like an ordinary and necessary business expense to me.



JMBF831 said:


> Forgive my elementary understanding, but, in a nutshell:
> 
> I drove 460 miles so I get to deduct .57 ($262.20) from my "earnings" of $455. Therefore, my taxable income is:
> 
> $455 - $262.20 = $192.80 (and of that $192.80 I can expect to pay...18% ?
> 
> Is this how it works, basically?


Assuming your "earnings" is the amount deposited to your account (so this is net of Uber's expenses), then, yes, this would give you a pretty good estimate of taxable income. Once you get over around $400 you owe self-employment tax on top of regular federal and state income tax, so that 18% is a little low.


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## JMBF831

StarzykCPA said:


> Guess I will help out with these. Hope no one minds
> 
> Yes. This sounds like an ordinary and necessary business expense to me.
> 
> Assuming your "earnings" is the amount deposited to your account (so this is net of Uber's expenses), then, yes, this would give you a pretty good estimate of taxable income. Once you get over around $400 you owe self-employment tax on top of regular federal and state income tax, so that 18% is a little low.


Thank you, sir! So far I've been sticking with 25% (I did 18% for taxes and 7% for wear and tear). Should I be doing something closer to 27% total? 20% taxes and 7% wear and tear?


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## StarzykCPA

Yep - that would give you a better estimate.


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## JMBF831

Thank you, thank you


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## Super dUber

How do tolls and gas factor into taxes? The figure I'm looking at for taxes is the paycheck amount going into my bank account right? That figure includes toll reimbursement. I'm technically making zero of that money as income. Do I subtract it from my reportable income? How about using Uber's gas card, where they deduct gas charges from your paycheck? If I used the card, would I save on taxes for that amount that went to gas because it's no longer going into my bank account? Or do I have to add it back to calculate reportable income?


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## UberTaxPro

Super dUber said:


> How do tolls and gas factor into taxes? The figure I'm looking at for taxes is the paycheck amount going into my bank account right? That figure includes toll reimbursement. I'm technically making zero of that money as income. Do I subtract it from my reportable income? How about using Uber's gas card, where they deduct gas charges from your paycheck? If I used the card, would I save on taxes for that amount that went to gas because it's no longer going into my bank account? Or do I have to add it back to calculate reportable income?


If you use the standard mileage deduction you can't also deduct gas. The tolls are a reimbursement not income. You can't deduct the tolls that you're reimbursed but you can deduct tolls that are not reimbursed like returning back through the toll empty to get back to your work area. If you use the standard mileage deduction you will have to include gas payments on the Uber card as income.


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## Super dUber

Why can you not deduct the tolls that you're reimbursed (since it's not income)? That brings me to ask, what number do you report as taxes? I'm looking at "earned income" from the Uber app. That number is the amount that comes into my bank account each week. It includes the reimbursed tolls as "earned income." So why can't I deduct that?


What else can you deduct with the standard mileage deduction? Is there a comprehensive list?


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## SteveGo

http://www.irs.gov/taxtopics/tc510.html

Third paragraph


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## UberUser001

UberPissed when applying for health care coverage at https://www.healthcare.gov would an uber driver report income as total income earned, or would it be OK to subtract estimated income tax, and expenses i.e. gas, mileage, etc?

thanks


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## StarzykCPA

UberUser001 said:


> UberPissed when applying for health care coverage at https://www.healthcare.gov would an uber driver report income as total income earned, or would it be OK to subtract estimated income tax, and expenses i.e. gas, mileage, etc?


You should report your net income - so subtract all relevant expenses. Keep in mind, this is just an estimate and you will need to reconcile your income at the end of the year if you qualify for any subsidies.

Side note: I noticed your other thread, but I'm guessing he's not around since it was posted back in April! I will probably start my own ask a CPA thread instead of posting my responses here shortly. I figured since the originator of this thread was not answering questions anymore, I could help out


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## Another Uber Driver

StarzykCPA said:


> I figured since the originator of this thread was not answering questions anymore, I could help out


.......and thank-you, Sirrah, for your kind assistance in answering questions, here. You have been most helpful and I do hope that you will continue your unstinting service to this forum. It does not go unappreciated...........

***Tips hat***


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## UberUser001

StarzykCPA said:


> You should report your net income - so subtract all relevant expenses. Keep in mind, this is just an estimate and you will need to reconcile your income at the end of the year if you qualify for any subsidies.
> 
> Side note: I noticed your other thread, but I'm guessing he's not around since it was posted back in April! I will probably start my own ask a CPA thread instead of posting my responses here shortly. I figured since the originator of this thread was not answering questions anymore, I could help out


Thanks for this incredibly helpful response!

So, after subtracting all expenses, many uber drivers have been able to show no net income resulting in no taxes for the year.

Then drivers could report zero income when applying for health care coverage and they could be eligible for state medicaid coverage, with no deductible, correct?


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## StarzykCPA

UberUser001 said:


> Thanks for this incredibly helpful response!
> 
> So, after subtracting all expenses, many uber drivers have been able to show no net income resulting in no taxes for the year.
> 
> Then drivers could report zero income when applying for health care coverage and they could be eligible for state medicaid coverage, with no deductible, correct?


This is assuming Uber is the only source of income for the drivers. If that is the case, then yes they would not show any income for the year and no income taxes are owed (though self employment taxes could be owed).

Sorry, I'm not too familiar with medicaid coverage laws, so I can't comment on that. It may also vary by state.


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## UberUser001

StarzykCPA can self employment tax have deductibles also or be avoided some other way?

thanks!


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## StarzykCPA

UberUser001 said:


> StarzykCPA can self employment tax have deductibles also or be avoided some other way?
> 
> thanks!


Self-employment tax is based on the combined net income of all your businesses. There are no additional deductions for it.

You can look at the bright side... SE tax does contribute to your social security benefits.


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## danahhoh

Hi. Can i deduct mileage from the time i turn uber on looking or going to a fare or does the fare have to be in the car?

I have a log book n have logged time on uber to time off line. Thanks


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## danahhoh

By the way i plan on the mileage deduction


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## LAuberX

StarzykCPA said:


> This is assuming Uber is the only source of income for the drivers. If that is the case, then yes they would not show any income for the year and no income taxes are owed (though self employment taxes could be owed).
> 
> Sorry, I'm not too familiar with medicaid coverage laws, so I can't comment on that. It may also vary by state.


and assuming the uber driver is SINGLE as "household" income is used to determine subsidy eligibility... without the subsidy you may as well apply directly to your favorite insurance company, you will pay the same... and yes, the price went up with all the "benefits" the ACA requires, there is no free lunch.

(disclaimer, I'm not a CPA but I have determined the affordable care act is not for many people)


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## UptownDriver

In nyc if I’m renting the car what do I deduct for taxes ? And what do I deduct to calculate taxable income ???


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## UberTaxPro

UptownDriver said:


> In nyc if I'm renting the car what do I deduct for taxes ? And what do I deduct to calculate taxable income ???


What type of lease do you have? Is it an operational lease or a capital lease?


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## UptownDriver

UberTaxPro said:


> What type of lease do you have? Is it an operational lease or a capital lease?


I have to assume it's a commercial lease it comes with the tlc plates and tlc insurance as well


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## UberTaxPro

UptownDriver said:


> I have to assume it's a commercial lease it comes with the tlc plates and tlc insurance as well


Do you keep the car? For how long? When do you give it back? Who pays the maintenance expenses?


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## UptownDriver

UberTaxPro said:


> Do you keep the car? For how long? When do you give it back? Who pays the maintenance expenses?


I keep it 24/7 I know how to separate business miles from personal miles 
And the maintenance exspenses is apart of the weekly rental payment


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## UberTaxPro

UptownDriver said:


> I keep it 24/7 I know how to separate business miles from personal miles
> And the maintenance exspenses is apart of the weekly rental payment


I would need to know a little more but this is sounding like an operational lease. You may not be able to use the SMD. Do you pay for your insurance or is that also included in the rental payment? At some point do you give the car back or does it become yours?


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## UberTaxPro

Anybody know what happened to UberPissed ?


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## UptownDriver

UberTaxPro said:


> I would need to know a little more but this is sounding like an operational lease. You may not be able to use the SMD. Do you pay for your insurance or is that also included in the rental payment? At some point do you give the car back or does it become yours?


The insurance is apart of the rental fee so I have to do actual expenses ?


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## UberTaxPro

UptownDriver said:


> The insurance is apart of the rental fee so I have to do actual expenses ?


Yes, from what you've told me so far. What happens to the car? Does it go back to the people renting it to you? Do you own another car?


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## UptownDriver

UberTaxPro said:


> Yes, from what you've told me so far. What happens to the car? Does it go back to the people renting it to you? Do you own another car?


That's my only car and I have it until I give it back so what should be deducting then ?


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## UberTaxPro

You can deduct all ordinary and necessary business expenses, your lease payment, gas, car washes, phone and accessories, crap for the customers like water bottles, barf bags etc... Bookkeeping, accounting, legal and tax expenses. This is not an all inclusive list, there is probably more. Since you use this car for personal things you should be keeping a mileage log so you can differentiate personal from business. I think you said your doing that already. All the above items should have personal % use factored out come tax time if you want to do it correctly.


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## UptownDriver

UberTaxPro said:


> You can deduct all ordinary and necessary business expenses, your lease payment, gas, car washes, phone and accessories, crap for the customers like water bottles, barf bags etc... Bookkeeping, accounting, legal and tax expenses. This is not an all inclusive list, there is probably more. Since you use this car for personal things you should be keeping a mileage log so you can differentiate personal from business. I think you said your doing that already. All the above items should have personal % use factored out come tax time if you want to do it correctly.


So I can do mileage and actual ??


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## UberTaxPro

UptownDriver said:


> So I can do mileage and actual ??


No, in your situation you'll need to use the actual expense method. You can never do both! Did I say something that made you think you could do both?


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## UptownDriver

UberTaxPro said:


> No, in your situation you'll need to use the actual expense method. You can never do both! Did I say something that made you think you could do both?


No you didn't make me think I had to do both but I've heard when you do actual exspense method you STILL have to keep track of mileage as well. So can you TRY to list literally everything I need to keep track for actual exspense method please ?


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## UberTaxPro

UptownDriver said:


> No you didn't make me think I had to do both but I've heard when you do actual exspense method you STILL have to keep track of mileage as well. So can you TRY to list literally everything I need to keep track for actual exspense method please ?


Yes, you still need a mileage log to figure your % business usage for your lease expenses. If you use the car for 95% business and 5% personal, you'll deduct 95% of your lease payment. There is no way I could list everything deductible. There's things out there that I don't even know exist that could be deductible!!! I think it would be easier (for me anyway) if you ask me about certain items you're thinking about deducting. Also, you might want to take a look at a schedule C form https://www.irs.gov/forms-pubs/schedule-c-form-1040-profit-or-loss-from-business. Look at the different categories and see if the things you want to deduct fit. This is where you'll be entering those deductions. Also notice on the form that you can write in anything else that doesn't fit into a category!


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## UptownDriver

UberTaxPro said:


> Yes, you still need a mileage log to figure your % business usage for your lease expenses. If you use the car for 95% business and 5% personal, you'll deduct 95% of your lease payment. There is no way I could list everything deductible. There's things out there that I don't even know exist that could be deductible!!! I think it would be easier (for me anyway) if you ask me about certain items you're thinking about deducting. Also, you might want to take a look at a schedule C form Look at the different categories and see if the things you want to deduct fit. This is where you'll be entering those deductions. Also notice on the form that you can write in anything else that doesn't fit into a category!


Alright First is a rental (insurance included) the same as leased car ?
Can I dedeuct 
Food ?
Car washes ?
I have 2 phones how much of that ?
Dry cleaning ?
Home office space to keep track of all this stuff ?
A new laptop to keep track ?
Meeting up with other car share drivers for lunch to bqrain storm ?
Tickets ?
Parking ?


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## UberTaxPro

UptownDriver said:


> Alright First is a rental (insurance included) the same as leased car ?
> Can I dedeuct
> Food ?
> Car washes ?
> I have 2 phones how much of that ?
> Dry cleaning ?
> Home office space to keep track of all this stuff ?
> A new laptop to keep track ?
> Meeting up with other car share drivers for lunch to bqrain storm ?
> Tickets ?
> Parking ?


Food ? nope
Car washes ? with actual expense method yes
I have 2 phones how much of that ? if you use them both for business the business use % for each
Dry cleaning ? nope
Home office space to keep track of all this stuff ? yes
A new laptop to keep track ? yes, business % use
Meeting up with other car share drivers for lunch to bqrain storm ? yes but only 50% of the lunch bill and you must have records including names of people at the meeting/lunch
Tickets ? never
Parking ? yes, if its for business


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## UptownDriver

Why not tickets ?
And what’s exactly is business parking ?
And gas I can correct ?
I’m in nyc with the tlc stuff does change any of this ??


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## tileguy

I uber fulltime. Would it benefit me to start my own LLC?


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## UberTaxPro

UptownDriver said:


> Why not tickets ?
> And what's exactly is business parking ?
> And gas I can correct ?
> I'm in nyc with the tlc stuff does change any of this ??


Why not tickets ? Tickets aren't a business expense. They're a fine for breaking the law. 
And what's exactly is business parking ? good question, maybe a pax requests that you wait for them and you need to pay parking?
And gas I can correct ? yes, correct you can deduct gas when using the actual expense method. 
I'm in nyc with the tlc stuff does change any of this ?? Wouldn't change anything. Any tlc expenses you incur would be deductible.



tileguy said:


> I uber fulltime. Would it benefit me to start my own LLC?


I can only speak about the tax issues. Probably not. I would need more info about your financials to answer definitely. A single member LLC is a disregarded entity by the IRS, you would continue to report your income and expenses on a schedule C. There is an option for a LLC to be taxed as a corporation but you would need to be NETTING upwards from $50 to $60 grand before even thinking about it in my opinion.


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## UptownDriver

UptownDriver said:


> Why not tickets ?
> And what's exactly is business parking ?
> And gas I can correct ?
> I'm in nyc with the tlc stuff does change any of this ??


It wouldn't let me reply to ya last response
so I can deduct the about 700 cash I paid to get my tlc license ? What if I'm doing via,Uber, lyft and the a few others do I separate the write offs ?


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## UberTaxPro

UptownDriver said:


> It wouldn't let me reply to ya last response
> so I can deduct the about 700 cash I paid to get my tlc license ? What if I'm doing via,Uber, lyft and the a few others do I separate the write offs ?


TLC license expenses are deductible. You can combine Uber, lyft and other rideshare activities on one schedule c at tax time.


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