# With tax season upon us, it's time for some hard facts! (NJ drivers)



## UberMane2015 (Aug 4, 2015)

Hey guys I have been driving Uber since August and have come across so many explanations on how to prepare my 1099 for this years taxes. I would really like some cold hard facts to some of these basic questions I keep coming across. Tax professionals please feel free to chime in as it would be greatly appreciated!

As a PART TIME Uber driver (I am planning on using standard deductions vs milage since I don't drive too much), can the following expenses be written off (please add or deduct as many as possible below):

- My car lease
- Cell phone bill
- Gas
-Tolls for pax trips both to and from destinations
- Food I either offer to my pax or eat while out Ubering
- My personal car insurance (Progressive)
- Car washes
- Oil changes
-Tires and any other car repairs
- I got into a car accident during a stint in Hoboken but thank God no passenger was in the car but my app was on. I was assessed a $500 deductible. Can the deductable be written off?
- I have gotten three parking tickets while driving Uber. Write off?

At this point, if these expenses above could be written off I am actually at a loss this year when it comes to my time Ubering. Is this a red flag for an audit? Lastly, I also have a full-time job as an engineer and accrue income in the 60K range. How would this effect my tax bracket from my full-time employment ? Are they counted (whether I make or lose money Ubering) as combined income?

I understand that (just like milage) I am only allowed to write off any expenses I use during actual Uber hours. I have calculated since I live awfully close to work and school, I actually use my car 90% of the time Ubering so I intend on calculating all above expenses as such. I have kept ever single receipt imaginable just in case I get audited. As I saw in another thread, we are not talking tens of thousands here so an audit although annoying is not something I am afraid of. It's more about being responsible and organized as an individual.

Thanks in advance for any comments or answers!


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## Jgunner (Oct 18, 2015)

Just a bit of advise concerning your vehicle expenses. Irs says you can use the milage deduction (57.5 cents per mile) or the actual expenses necessary to operate your vehicle for business purposes. If you use the milage deduction the first year you put your vehicle in service then you can use the actual expenses or the milage deduction in future years. BUT if you use the actual expenses the first year then you MUST use it in all future years. A good tax preparer will calculate both ways and advise.

Cell phone, food for passencers, car washes, tolls are additional expenses for whichever method is used. Lease payment are pro rated for the business use. Only the car insurance that pertains to the business use of your car is deductable. If Progressive insures you for Uber driving then the $500 would be deductable Parking tickets are not deductable.

It's not unusual to operate your business at a loss. The loss amount would reduce your taxable income from your regular job.

I used to work for H&R Block and now work for myself.


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## UberTaxPro (Oct 3, 2014)

Jgunner said:


> Just a bit of advise concerning your vehicle expenses. Irs says you can use the milage deduction (57.5 cents per mile) or the actual expenses necessary to operate your vehicle for business purposes. If you use the milage deduction the first year you put your vehicle in service then you can use the actual expenses or the milage deduction in future years. BUT if you use the actual expenses the first year then you MUST use it in all future years. A good tax preparer will calculate both ways and advise.
> 
> Cell phone, food for passencers, car washes, tolls are additional expenses for whichever method is used. Lease payment are pro rated for the business use. Only the car insurance that pertains to the business use of your car is deductable. If Progressive insures you for Uber driving then the $500 would be deductable Parking tickets are not deductable.
> 
> ...


car washes are not deductible in addition to the mileage deduction


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## UberTaxPro (Oct 3, 2014)

UberMane2015 said:


> Hey guys I have been driving Uber since August and have come across so many explanations on how to prepare my 1099 for this years taxes. I would really like some cold hard facts to some of these basic questions I keep coming across. Tax professionals please feel free to chime in as it would be greatly appreciated!
> 
> As a PART TIME Uber driver (I am planning on using standard deductions vs milage since I don't drive too much), can the following expenses be written off (please add or deduct as many as possible below):
> 
> ...


Actual Expenses: https://www.irs.gov/publications/p463/ch04.html#en_US_2014_publink100033949
Standard Mileage Rate: https://www.irs.gov/publications/p463/ch04.html#en_US_2014_publink100033935


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## makinthemagic (Oct 8, 2015)

- My car lease - No
- Cell phone bill - Yes*. You can deduct the portion of the bill used for ride share driving. 
- Gas - No
-Tolls for pax trips both to and from destinations - Yes
- Food I either offer to my pax or eat while out Ubering - Yes
- My personal car insurance (Progressive) - Yes*, but only the portion used for ride share driving.
- Car washes - I'd say yes as long as they are reasonable
- Oil changes - No
-Tires and any other car repairs - No
- I got into a car accident during a stint in Hoboken but thank God no passenger was in the car but my app was on. I was assessed a $500 deductible. Can the deductable be written off? - No
- I have gotten three parking tickets while driving Uber. Write off? - No


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## StarzykCPA (Aug 6, 2015)

I'm in agreement with the above post, and to answer your other questions:



UberMane2015 said:


> At this point, if these expenses above could be written off I am actually at a loss this year when it comes to my time Ubering. Is this a red flag for an audit? Lastly, I also have a full-time job as an engineer and accrue income in the 60K range. How would this effect my tax bracket from my full-time employment ? Are they counted (whether I make or lose money Ubering) as combined income?


A loss is probably more likely to get audited, but it is what it is. Take the deductions you are entitled to.

Your loss from driving will offset part of your income from your full-time job. They are combined for income tax purposes.


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## Ubercentralnj (Oct 2, 2015)

StarzykCPA said:


> I'm in agreement with the above post, and to answer your other questions:
> 
> A loss is probably more likely to get audited, but it is what it is. Take the deductions you are entitled to.
> 
> Your loss from driving will offset part of your income from your full-time job. They are combined for income tax purposes.


Where do you stand on claiming a Home office.? I have a room that I only use to do my Uber paperwork, for example reviewing the billing for each ride, which is often incorrect, and maintain records to ensure I am paying appropriate taxes. IRS pub 587 states
"To qualify to deduct expenses for business use of your home, you must use part of your home:

Exclusively and regularly as your principal place of business (defined later),
Later it states
To determine whether your home is your principal place of business, you must consider:


The relative importance of the activities performed at each place where you conduct business, and

The amount of time spent at each place where you conduct business.
Your home office will qualify as your principal place of business if you meet the following requirements.


You use it exclusively and regularly for administrative or management activities of your trade or business.

You have no other fixed location where you conduct substantial administrative or management activities of your trade or business.

*Administrative or management activities.* There are many activities that are administrative or managerial in nature. The following are a few examples.

Billing customers, clients, or patients.

Keeping books and records.

Ordering supplies.

Setting up appointments.

Forwarding orders or writing reports.


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## Uberduberdoo (Oct 22, 2015)

makinthemagic said:


> - My car lease - No
> - Cell phone bill - Yes*. You can deduct the portion of the bill used for ride share driving.
> - Gas - No
> -Tolls for pax trips both to and from destinations - Yes
> ...


Are you saying, gas expense is non deductible? along with oil changes, tires and repairs. please advise


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## makinthemagic (Oct 8, 2015)

ubreduberdoo said:


> Are you saying, gas expense is non deductible? along with oil changes, tires and repairs. please advise


If I am understanding you correctly and you are planning on taking the standard mileage rate then yes, those expenses are not deductible. They are included in the mileage rate.


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## UberDriverTaxExpert (Nov 11, 2015)

I agree with a majority of the information posted above but......why in the world would you want to prepare your own taxes? Why risk an audit? Why are you not focusing on growing your business? Taking a loss (while legal) on a schedule C will increase your chance of an audit dramatically. You better have all your i's dotted and t's crossed. You have so many great tax options like possibly depreciating your vehicle OR setting up your own retirement plan OR getting advice that will help you plan for the future. Is it really a good idea to reduce all your earnings down to nothing just to get a refund OR not pay taxes? If you have the legit deductions then OK but one day you will apply for social security and receive $200 a month instead of $3000 a month. Work hard but smart. Hire a professional that knows your industry and can guide you into the future.


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## Ubercentralnj (Oct 2, 2015)

UberDriverTaxExpert said:


> I agree with a majority of the information posted above but......why in the world would you want to prepare your own taxes? Why risk an audit? Why are you not focusing on growing your business? Taking a loss (while legal) on a schedule C will increase your chance of an audit dramatically. You better have all your i's dotted and t's crossed. You have so many great tax options like possibly depreciating your vehicle OR setting up your own retirement plan OR getting advice that will help you plan for the future. Is it really a good idea to reduce all your earnings down to nothing just to get a refund OR not pay taxes? If you have the legit deductions then OK but one day you will apply for social security and receive $200 a month instead of $3000 a month. Work hard but smart. Hire a professional that knows your industry and can guide you into the future.


TaxExpert, I am not looking to Game the system or take a loss. I simply want to deduct the mileage that I feel is reasonable to deduct. For better or worse I often Uber from my house and return home before the next request comes in. I'm simply working within the framework the IRS provides. For example for the home office I'm only going to claim the Safe Harbor deductions, I'm not going to beef it up with claiming the percentage of utilities, etc to run my home. I keep a trip log as required by the IRS, I even use the template they recommend. Do you think I'd be better off simply not addressing in my log the fact that I'm home in between trips? My house is situated nicely near 2 train stations, a major bus station, and popular bars. Why should the miles to/from my home be less deductible than if I decide to spend my time in between rides in a parking lot 1/4 mile from my house? If I do get audited I'm not going to lie and claim to have sat in a train station parking lot for 2 hours when I was actually home. I feel like a total loser sitting in my car waiting for a ping, even for just 10 minutes, I don't know how other Ubers or taxis can stay sane doing that. So I've read the code, it appears that reviewing the billing for my rides, requesting corrections when needed from my billing subcontractor (Uber), maintaining records, etc qualifies me for a home office since I have a spare room that I use exclusively and regularly for these purposes, so that's what I intend to do. I think that puts me light years ahead of these idiots who think they can deduct every mile they drive as long as the App is on.

And where do I find a tax preparer with expertise on prepping Uber tax returns? I would think by now if there were any they would be hitting this forum pretty hard to drum up business.


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## UberTaxPro (Oct 3, 2014)

Ubercentralnj said:


> TaxExpert, I am not looking to Game the system or take a loss. I simply want to deduct the mileage that I feel is reasonable to deduct. For better or worse I often Uber from my house and return home before the next request comes in. I'm simply working within the framework the IRS provides. For example for the home office I'm only going to claim the Safe Harbor deductions, I'm not going to beef it up with claiming the percentage of utilities, etc to run my home. I keep a trip log as required by the IRS, I even use the template they recommend. Do you think I'd be better off simply not addressing in my log the fact that I'm home in between trips? My house is situated nicely near 2 train stations, a major bus station, and popular bars. Why should the miles to/from my home be less deductible than if I decide to spend my time in between rides in a parking lot 1/4 mile from my house? If I do get audited I'm not going to lie and claim to have sat in a train station parking lot for 2 hours when I was actually home. I feel like a total loser sitting in my car waiting for a ping, even for just 10 minutes, I don't know how other Ubers or taxis can stay sane doing that. So I've read the code, it appears that reviewing the billing for my rides, requesting corrections when needed from my billing subcontractor (Uber), maintaining records, etc qualifies me for a home office since I have a spare room that I use exclusively and regularly for these purposes, so that's what I intend to do. I think that puts me light years ahead of these idiots who think they can deduct every mile they drive as long as the App is on.
> 
> And where do I find a tax preparer with expertise on prepping Uber tax returns? I would think by now if there were any they would be hitting this forum pretty hard to drum up business.


This board is really not for Tax preparers to drum up business otherwise it becomes a big commercial. Personally I believe most Uber drivers can grasp the concepts needed to do their own taxes especially with the all the free help found on this board and elsewhere. You seem willing and able to handle it because you've read the code and have an argument for your position. No tax preparer knows your situation better than you so trust yourself and as long as you're being honest take what you're entitled to just be prepared to back it up. By the way...if you can show a large % of your pings near your home office I think your argument is good. PM me anytime!


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## ubermeister (Nov 17, 2015)

Ubercentralnj said:


> And where do I find a tax preparer with expertise on prepping Uber tax returns? I would think by now if there were any they would be hitting this forum pretty hard to drum up business.


I'm not a tax preparer, but I'm working on a startup that helps answer common tax/accounting questions like yours above. Message me if you're interested, I'm sure I can help you out.


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## UberTaxPro (Oct 3, 2014)

ubermeister said:


> I'm not a tax preparer, but I'm working on a startup that helps answer common tax/accounting questions like yours above. Message me if you're interested, I'm sure I can help you out.


 Nice idea with your business but the problem is with Uber rates as low as they are now most Uber drivers netting $0 after expenses! How are they going to pay you?


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## Felix Kander (Nov 18, 2015)

UberTaxPro said:


> car washes are not deductible in addition to the mileage deduction


I did't think was true -- aren't car washes are an operational expense, not an actual car expense. It's not a cost associated with driving a car, it's the cost associated with working for Uber (since Uber requires that you keep your car clean).


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## Fuzzyelvis (Dec 7, 2014)

StarzykCPA said:


> I'm in agreement with the above post, and to answer your other questions:
> 
> A loss is probably more likely to get audited, but it is what it is. Take the deductions you are entitled to.
> 
> Your loss from driving will offset part of your income from your full-time job. They are combined for income tax purposes.





Felix Kander said:


> I did't think was true -- aren't car washes are an operational expense, not an actual car expense. It's not a cost associated with driving a car, it's the cost associated with working for Uber (since Uber requires that you keep your car clean).


The more you drive a car the more often it needs to be washed. So more miles, more washes.
Your argument is like saying Uber requires your brakes to work so they're an extra expense and not included in mileage.


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## Fuzzyelvis (Dec 7, 2014)

StarzykCPA


You keep agreeing that eating out is deductible. Everything I have read from the IRS states that is not the case unless you are a certain distance from home or in an overnight trip.

Food for pax yes. Food for you no.

Explain.


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## UberTaxPro (Oct 3, 2014)

Felix Kander said:


> I did't think was true -- aren't car washes are an operational expense, not an actual car expense. It's not a cost associated with driving a car, it's the cost associated with working for Uber (since Uber requires that you keep your car clean).


It is a gray area. You could argue that we have to wash our cars more than the average person because pax expect ultra clean cars and are ratings are dependent pax being happy etc...etc.. so we need to wash our cars once a week instead of once a month(or whatever time period you decide). You might be able to deduct 3 of the 4 washes because they are more than the average person would require. Generally, car washes are considered auto expenses.


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## SCdave (Jun 27, 2014)

The only meals / entertainment expense I would deduct would be
- I Drive to an Event for the purpose to Uber. I stay overnight. I can deduct all meals (and lodging expenses also).
- I take another Driver out for dinner and discuss my Driving Service Business. I pay for both of our meals. I deduct 50% of the Check Total. Actually I don't even have to be driving on this day but I have to discuss business.

That's about it I believe for being able to deduct Meals/Entertainment as a business expense, right?


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## SCdave (Jun 27, 2014)

Until I started my Driving Service for Uber, I never used a car wash service. To keep my vehicle exterior/interior clean I use a car wash monthly service. This is essential to my Driving Service. If my vehicle is not professionally cleaned, this could adversely affect my business and even contribute to being Deactivated. I deduct all vehicle cleaning costs as an expense.

I also deducted all additional cleaning supplies I purchase like a spray carpet cleaner, windshield glass cleaner, etc..


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## UberTaxPro (Oct 3, 2014)

SCdave said:


> Until I started my Driving Service for Uber, I never used a car wash service. To keep my vehicle exterior/interior clean I use a car wash monthly service. This is essential to my Driving Service. If my vehicle is not professionally cleaned, this could adversely affect my business and even contribute to being Deactivated. I deduct all vehicle cleaning costs as an expense.
> 
> I also deducted all additional cleaning supplies I purchase like a spray carpet cleaner, windshield glass cleaner, etc..


I also pay for a monthly car wash plan(unlimited car washes). I plan on deducting 75% of that bill as above average car washing with the understanding that it might be challenged. I'll include a statement explaining it also.


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## Felix Kander (Nov 18, 2015)

What about tolls? I drive through a toll twice a day on my commute...


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## UberTaxPro (Oct 3, 2014)

Felix Kander said:


> What about tolls? I drive through a toll twice a day on my commute...


if your commuting no. If your on business yes. Uber reimburses tolls on uber trips. You cant deduct tolls if they are reimbursed..


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## SCdave (Jun 27, 2014)

UberTaxPro said:


> if your commuting no. If your on business yes. Uber reimburses tolls on uber trips. You cant deduct tolls if they are reimbursed..


Also, if it is while you are conducting business, then yes, deduct the tolls.

NO - You weren't driving for business. You were driving to work as a commuter or for pleasure. You do not deduct this toll.

NO - While on a Trip, Uber reimbursed you the cost of the Toll. You do not deduct this toll.

YES - While conducting your Driving Service (for Uber/Lyft or another OnDemand or Independent Contractor business you do). For example, on the return trip you were required to pay a toll again but you did not have " a Fare " at that time and thus Uber could/did not reimburse you. This "un-reimbursed" toll can be deducted.

I am not a CPA or Tax Pro. Pls correct me if I'm wrong. Or ignore me. Or say I'm an idiot. Any work for me.


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## UberTaxPro (Oct 3, 2014)

SCdave said:


> Also, if it is while you are conducting business, then yes, deduct the tolls.
> 
> NO - You weren't driving for business. You were driving to work as a commuter or for pleasure. You do not deduct this toll.
> 
> ...


You got it!


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## StarzykCPA (Aug 6, 2015)

Fuzzyelvis said:


> StarzykCPA
> 
> You keep agreeing that eating out is deductible. Everything I have read from the IRS states that is not the case unless you are a certain distance from home or in an overnight trip.
> 
> ...


I didn't notice the "eat while out ubering" from the response I referenced earlier in the thread - I see it now. I don't recall mentioning this any other time, but I'm in agreement with you. Apologize for the confusion.


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## David Pickett (Nov 2, 2015)

Oil companies went to court for their rig guys, and won: food your employer supplies to keep you on the job site is not your income, but is a business expense. Now, for an Uber driver, if you start driving right after breakfast, I would say breakfast is not deductible, but if Uber takes you far from home getting good hits where you are, eating there is an employer provided expense to keep you on the job site. Going home to eat would be a business hardship, both in miles, lost time and lower hit rate territory. Don't go home right after lunch, though!


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## UberTaxPro (Oct 3, 2014)

David Pickett said:


> Oil companies went to court for their rig guys, and won: food your employer supplies to keep you on the job site is not your income, but is a business expense. Now, for an Uber driver, if you start driving right after breakfast, I would say breakfast is not deductible, but if Uber takes you far from home getting good hits where you are, eating there is an employer provided expense to keep you on the job site. Going home to eat would be a business hardship, both in miles, lost time and lower hit rate territory. Don't go home right after lunch, though!


Nice try but an employer may exclude from taxable wages the value of meals it provides to employees if they are provided 1. on the *employer's business premises, *and 2. for the employer's convenience. The street corner does not qualify as "employer's business premises" like the oil companies rig location apparently did. Also, the employee would have to be a payroll employee, most Uber drivers are not. Very interesting however, thanks!


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## David Pickett (Nov 2, 2015)

The same principle still applies for any employer, employee, meal. Why would the self-employed not at home but in the workplace on the job not be allowed to take meals as a business expense?


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## UberTaxPro (Oct 3, 2014)

David Pickett said:


> The same principle still applies for any employer, employee, meal. Why would the self-employed not at home but in the workplace on the job not be allowed to take meals as a business expense?


Self employed people can deduct 50% (same for most business entities, sole proprietor, corp, s corp, partnership etc..)of meals or entertainment while:
1 *Traveling away from home*
2 entertaining customers at a restaurant or other location
3 attending a business convention or reception, business meeting, or business luncheon
4 obtaining deductible educational expenses, such as meals during a continuing educational seminar
There are some exceptions like restaurants can deduct 100% of meals for employees.
*Taxpayers are considered "traveling away from home" if their duties require them to be away from home substantially longer than an ordinary day's work and they need to sleep or rest to meet the standards of their work. *
The deduction you're talking about(oil rig example) is for employers and is considered a *fringe benefit to the employee *and requires an* employer-employee relationship* to even be considered. Most Uber schedule C filers do not have this relationship. To create this relationship one would have to have a payroll set up. Instead of paying quarterly estimated taxes you would issue yourself a paycheck on a regular basis with all the proper taxes taken out(income, fica, state, local). With this employer employee relationship set up you could *consider *the deduction and fringe benefit the oil guys got. Yes, a sole proprietor can have a payroll to establish this employer employee relationship, but the problem for most Uber drivers now is we're operating in the red (negative). It's tough to have a payroll with no income! Right?


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## David Pickett (Nov 2, 2015)

OK, so they expect you to brown-bag your lunch or pay your own! Maybe if you work 12 hours, you can get dinner?


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## UberTaxPro (Oct 3, 2014)

David Pickett said:


> OK, so they expect you to brown-bag your lunch or pay your own! Maybe if you work 12 hours, you can get dinner?


maybe 12 hours and a nap! LOL


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## David Pickett (Nov 2, 2015)

Well, some of us take this seriously. If you had a boss, being waylaid for OT is a possibility. If you work for yourself, you need to brown bag enough meals to make it home, I suppose. If you got a rally long ride, not a likely, but rather an emergent, situation, then you might be in a position to say your job unexpectedly imposed on you the need for another meal, which would be tax deductible. I hear on NYC guys being hit up to go to Harrisburg, and the like! This business is more random than farming, not just "Make hay while the sun shines!"


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## Older Chauffeur (Oct 16, 2014)

I have been engaged in contract driving for over 13 years, and my CPA takes a deduction on Schedule C for on the job meals at the 50% rate. We're not talking a lot of money, just a few dollars occasionally. He is pretty conservative, requiring receipts for business and personal deductions along with a mileage log. No problems with the IRS, but I have a shown a profit every year. (My regular clients often pay for my meals, which is a nice bonus. )


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## UberTaxPro (Oct 3, 2014)

Older Chauffeur said:


> I have been engaged in contract driving for over 13 years, and my CPA takes a deduction on Schedule C for on the job meals at the 50% rate. We're not talking a lot of money, just a few dollars occasionally. He is pretty conservative, requiring receipts for business and personal deductions along with a mileage log. No problems with the IRS, but I have a shown a profit every year. (My regular clients often pay for my meals, which is a nice bonus. )


 Of course, once in awhile drivers * duties require them to be away from home substantially longer than an ordinary day's work and they need to sleep or rest to meet the standards of their work. *On those occasions you can take the 50% meals deduction. Same for meals with clients and potential clients. By the way, the IRS only requires you to have receipts for meals costing $75 or more. That's great you're doing well! I like your business model...no equipment or expenses! I was thinking of doing something similar driving people's cars from the Northeast to FL.


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## Older Chauffeur (Oct 16, 2014)

UberTaxPro said:


> Of course, once in awhile drivers * duties require them to be away from home substantially longer than an ordinary day's work and they need to sleep or rest to meet the standards of their work. *On those occasions you can take the 50% meals deduction. Same for meals with clients and potential clients. By the way, the IRS only requires you to have receipts for meals costing $75 or more. That's great you're doing well! I like your business model...no equipment or expenses! I was thinking of doing something similar driving people's cars from the Northeast to FL.


My CPA wants me to keep good records and backup for my deductions. He treats my meals like those for police officers. I have had overnight hotel stays for which I took deductions, when the requirements of the clients made it necessary.
My people are local, but I have on occasion made trips to northern CA for one client whose wife prefers to fly. He likes having one of his cars when they spend a few days in the wine country, so I have driven his Maybachs and a Bentley to meet him at the airport and then flown home, reversing the trip a few days later. I love a road trip, so would jump at the chance to transport cars for snowbirds. Just haven't figured out how to make the connections yet.


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## UberTaxPro (Oct 3, 2014)

Older Chauffeur said:


> My CPA wants me to keep good records and backup for my deductions. He treats my meals like those for police officers. I have had overnight hotel stays for which I took deductions, when the requirements of the clients made it necessary.
> My people are local, but I have on occasion made trips to northern CA for one client whose wife prefers to fly. He likes having one of his cars when they spend a few days in the wine country, so I have driven his Maybachs and a Bentley to meet him at the airport and then flown home, reversing the trip a few days later. I love a road trip, so would jump at the chance to transport cars for snowbirds. Just haven't figured out how to make the connections yet.


check out this guy http://www.glennsdrivingservice.com/


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## Older Chauffeur (Oct 16, 2014)

Thanks. Glenn seems on the ball and well experienced at his game. I'm not far from Santa Barbara and I know there are a couple of drivers there who do this sort of trip for people there, based on word of mouth recommendations.


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## afrojoe824 (Oct 21, 2015)

StarzykCPA said:


> I'm in agreement with the above post, and to answer your other questions:
> 
> A loss is probably more likely to get audited, but it is what it is. Take the deductions you are entitled to.
> 
> Your loss from driving will offset part of your income from your full-time job. They are combined for income tax purposes.


Quick question..

I have heard independent contractors have to pay "taxes" every 3 months (quarterly) since it's not a regular check from an employer taking taxes from you. So If we haven't done this all year, are we subjected to a penalty of some sort? Uber/Lyft has not been clear about this and only explained we would receive a 1099 at the end of the year.


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## UberTaxPro (Oct 3, 2014)

afrojoe824 said:


> Quick question..
> 
> I have heard independent contractors have to pay "taxes" every 3 months (quarterly) since it's not a regular check from an employer taking taxes from you. So If we haven't done this all year, are we subjected to a penalty of some sort? Uber/Lyft has not been clear about this and only explained we would receive a 1099 at the end of the year.


You run your own business driving for Uber/Lyft. Uber/Lyft have no obligation to "be clear" about your tax situation. It's 100% your responsibility. 
*Generally*, if you owe more than $1000 at the end of the year you will have to pay an underpayment penalty and interest. The estimated taxes should be done 4 times a year (not exactly quarterly) following this IRS schedule for 2015 taxes:

April 18, 2015
June 15, 2015
Sept. 15, 2015
Jan. 17, 2016
You can figure the penalty on IRS form 2210 or if you don't want to file 2210 the IRS will just send you a bill. Isn't that nice of them?

Here's some reading on the subject: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estimated-Taxes , https://www.irs.gov/publications/p505/ch02.html and http://www.hrblock.com/free-tax-tip...Estimated-Tax.html?action=ga&aid=27047&out=vm


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## afrojoe824 (Oct 21, 2015)

UberTaxPro said:


> You run your own business driving for Uber/Lyft. Uber/Lyft have no obligation to "be clear" about your tax situation. It's 100% your responsibility.
> *Generally*, if you owe more than $1000 at the end of the year you will have to pay an underpayment penalty and interest. The estimated taxes should be done 4 times a year (not exactly quarterly) following this IRS schedule for 2015 taxes:
> 
> April 18, 2015
> ...


Well in this sense, since we're filing with our expenses, in my case .57cents per mile, I'm coming out at a loss and technically won't owe money because of my losses. So what does it mean when I "owe" more than $1000.

and have you been fo;omg tjese estimated taxes throughout the year?


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## UberTaxPro (Oct 3, 2014)

afrojoe824 said:


> Well in this sense, since we're filing with our expenses, in my case .57cents per mile, I'm coming out at a loss and technically won't owe money because of my losses. So what does it mean when I "owe" more than $1000.
> 
> and have you been fo;omg tjese estimated taxes throughout the year?


It means that your tax bill (amount you owe) after completing your taxes is more than $1000. You're correct, most uber drivers, I've spoken with are operating at a loss after deducting mileage and other expenses and will owe $0 on their uber income come April 15. If you have a "net operating loss" at the end of 2015 that you can't use this year to reduce tax from other income (like a real job) you can carry back the loss 2 years or forward 20 years.
With a NOL at the end of this year you could file an amended return for years 2014 and/or 2013 and get back money you paid in taxes for those years. If you didn't owe taxes in those years you can use the NOL in future years up to 20 years!


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## afrojoe824 (Oct 21, 2015)

UberTaxPro said:


> It means that your tax bill (amount you owe) after completing your taxes is more than $1000. You're correct, most uber drivers, I've spoken with are operating at a loss after deducting mileage and other expenses and will owe $0 on their uber income come April 15. If you have a "net operating loss" at the end of 2015 that you can't use this year to reduce tax from other income (like a real job) you can carry back the loss 2 years or forward 20 years.
> With a NOL at the end of this year you could file an amended return for years 2014 and/or 2013 and get back money you paid in taxes for those years. If you didn't owe taxes in those years you can use the NOL in future years up to 20 years!


Yeah. I got my real job and they take taxes from me. But with Uber and Lyft YTD (Started in April), I'm at NOL. So I guess I shouldn't worry though. What I like about the Lyft Function here in LA, is that I could use the filter when I'm ready to go home or go back to the busy spot after driving to a dead area hoping to catch a pax but then they're deductible dead miles. Thanks for your help. Much appreciated and clarified my answers.


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## UberTaxPro (Oct 3, 2014)

afrojoe824 said:


> Yeah. I got my real job and they take taxes from me. But with Uber and Lyft YTD (Started in April), I'm at NOL. So I guess I shouldn't worry though. What I like about the Lyft Function here in LA, is that I could use the filter when I'm ready to go home or go back to the busy spot after driving to a dead area hoping to catch a pax but then they're deductible dead miles. Thanks for your help. Much appreciated and clarified my answers.


Good luck. Sounds like your NOL will help reduce your tax bill from your real job this year. NOL might be the best thing about this rideshare business!


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## ORT (Nov 14, 2015)

UberTaxPro said:


> It is a gray area. You could argue that we have to wash our cars more than the average person because pax expect ultra clean cars and are ratings are dependent pax being happy etc...etc.. so we need to wash our cars once a week instead of once a month(or whatever time period you decide). You might be able to deduct 3 of the 4 washes because they are more than the average person would require. Generally, car washes are considered auto expenses.


The IRS does not care about your ratings from the pax, really, lol.


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## afrojoe824 (Oct 21, 2015)

ORT said:


> The IRS does not care about your ratings from the pax, really, lol.


I got unlimited car washes for $40 a month. so I take it in 2-3x a week haha but I wish I could deduct that.



UberTaxPro said:


> Good luck. Sounds like your NOL will help reduce your tax bill from your real job this year. NOL might be the best thing about this rideshare business!


Totally agree. That's why sometimes I don't mind the dead miles but I try to reduce it as much as possible. I love my baby. lol


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## StarzykCPA (Aug 6, 2015)

afrojoe824 said:


> Well in this sense, since we're filing with our expenses, in my case .57cents per mile, I'm coming out at a loss and technically won't owe money because of my losses. So what does it mean when I "owe" more than $1000.
> 
> and have you been fo;omg tjese estimated taxes throughout the year?


Yep so no worries about estimates.



UberTaxPro said:


> Good luck. Sounds like your NOL will help reduce your tax bill from your real job this year. NOL might be the best thing about this rideshare business!


Haha yes, I guess you can say it definitely helps your current cash flow. But long term? Hmm


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## afrojoe824 (Oct 21, 2015)

StarzykCPA said:


> Yep so no worries about estimates.
> 
> Haha yes, I guess you can say it definitely helps your current cash flow. But long term? Hmm


Yeah I don't know about long term. I only plan on doing this ride share gig for the year until I leave the country next year and study abroad. Gotta get as much $$ as possible


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## gaj (Nov 11, 2014)

Everyone knows that you can deduct all "app-on" miles as an expense. Same with Uber commissions, SRF and Uber phone rental fees.

It is amusing to me that everyone thinks they can deduct meals, gas, car washes, tires, christmas lights you put on your car for the holidays, etc.

True, *some* or *some percentage of* some of the above might be deductible. Some is in a kind of grey area. Some is definitely not deductible.

Question is- why would you risk it for a few extra bucks to deduct? Or if you are going to risk it, why on earth would you do it without the advice of a professional accountant with tax training (and bulletproof documentation)?

Risk vs. Reward.

Did you know businesses operating at a loss (look in the mirror) get audited more often than businesses making a profit?

So far, I've seen at least 6 of the 8 common reasons for being audited discussed in this thread:

http://quickbooks.intuit.com/r/taxes/8-common-tax-audit-triggers

Personally, I only deduct the items in the first line of this post. I don't need the IRS on my ass 5 years from now, trying to explain why I deducted an $8 McDonalds meal years ago only to pay 5 years interest and penalties because I thought I could be cute and get away with it.

g


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## Older Chauffeur (Oct 16, 2014)

Thanks for the link- interesting exercise. I filed Scedule C in 2014, as I have for several years. But my gross income was on the low end, (as I lean more towards retirement) and that puts me at 1 in 100 chance of an audit. They don't explain why that is......


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