# The Tax Man Is Coming, The Tax Man Is Coming, THE TAX MAN IS COMING!!



## SouthernYankee07 (Sep 20, 2017)

Today as I swiped my credit card for, what I hope will be, the last of my Christmas shopping I couldn't help thinking how my tax return is going to take one hell of a shot with all the damage I've done to it lately. Then, just like the blast my tax return is going to have to take for the team, I got what felt like a forearm shiver thinking about how my Uber Driving will effect my tax return total.....
Does anyone know if Uber deducts state & federal taxes from your fares before they're paid out? Since I'm an "independent contractor" will my hard paid taxes dollars take a beating? I've also heard that we (as drivers) may be able to write off gas as an expense, does anyone know if that's true? Are there expenses that I may be able to write off that I'm not aware of? A friend of mine who works in pharm sales said her company gives her "x" amount of money per mile she drives for work & since that amount is less than "state minimum" (kind of like state minimum hourly wage vs state minimum hourly wage for bartenders or servers) the state will make up for the gap between the two in her return refund. Is that for real?
I'm not asking anyone to be my "tax professional" here I'm just looking to hear y'all's tax experiences & maybe get some advice as a first timer lol


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## unPat (Jul 20, 2016)

My only advice , post it under TAXES on this forum. UberTaxPro will answer your questions. I never seen him post here.


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## Wrb06wrx (Sep 20, 2017)

I hope youve been keeping track of your mileage and expenses..... 

If you have been youll be good just see a good tax guy


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## SEAL Team 5 (Dec 19, 2015)

SouthernYankee07 said:


> Does anyone know if Uber deducts state & federal taxes from your fares before they're paid out?


Just by this question I can tell that you really don't have a clue about taxes and being self employed. You must complete a W-4 with your employer before you begin work for them to withhold taxes.

You will have to file an SE tax form along with a Schedule C. Your SE tax form is a self employment tax of 15.3% of your net revenue. Your Schedule C is the deductions of your business expenses that gives you your net revenue for that business. Don't forget that after your 15.3% SE tax you will still owe income tax on your income (profit/loss from a business). I suggest that you get some professional tax help.


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## Oscar Levant (Aug 15, 2014)

SouthernYankee07 said:


> Today as I swiped my credit card for, what I hope will be, the last of my Christmas shopping I couldn't help thinking how my tax return is going to take one hell of a shot with all the damage I've done to it lately. Then, just like the blast my tax return is going to have to take for the team, I got what felt like a forearm shiver thinking about how my Uber Driving will effect my tax return total.....
> Does anyone know if Uber deducts state & federal taxes from your fares before they're paid out? Since I'm an "independent contractor" will my hard paid taxes dollars take a beating? I've also heard that we (as drivers) may be able to write off gas as an expense, does anyone know if that's true? Are there expenses that I may be able to write off that I'm not aware of? A friend of mine who works in pharm sales said her company gives her "x" amount of money per mile she drives for work & since that amount is less than "state minimum" (kind of like state minimum hourly wage vs state minimum hourly wage for bartenders or servers) the state will make up for the gap between the two in her return refund. Is that for real?
> I'm not asking anyone to be my "tax professional" here I'm just looking to hear y'all's tax experiences & maybe get some advice as a first timer lol


Just go with the $0.54 per mile deduction that should put your tax liability to near zero


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## Chris1973 (Oct 9, 2017)

SouthernYankee07 said:


> Today as I swiped my credit card for, what I hope will be, the last of my Christmas shopping I couldn't help thinking how my tax return is going to take one hell of a shot with all the damage I've done to it lately. Then, just like the blast my tax return is going to have to take for the team, I got what felt like a forearm shiver thinking about how my Uber Driving will effect my tax return total.....
> Does anyone know if Uber deducts state & federal taxes from your fares before they're paid out? Since I'm an "independent contractor" will my hard paid taxes dollars take a beating? I've also heard that we (as drivers) may be able to write off gas as an expense, does anyone know if that's true? Are there expenses that I may be able to write off that I'm not aware of? A friend of mine who works in pharm sales said her company gives her "x" amount of money per mile she drives for work & since that amount is less than "state minimum" (kind of like state minimum hourly wage vs state minimum hourly wage for bartenders or servers) the state will make up for the gap between the two in her return refund. Is that for real?
> I'm not asking anyone to be my "tax professional" here I'm just looking to hear y'all's tax experiences & maybe get some advice as a first timer lol


With a pretty face like that why are you worrying about taxes and driving Uber? Unpat is correct though, all of the information you need is already in the taxes forum. Seal team 5 also gave you some great advice. Spend a couple hundred with a professional and potentially save 1000's.


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## DrivingForYou (Aug 6, 2017)

SouthernYankee07 said:


> Today as I swiped my credit card for, what I hope will be, the last of my Christmas shopping I couldn't help thinking how my tax return is going to take one hell of a shot with all the damage I've done to it lately. Then, just like the blast my tax return is going to have to take for the team, I got what felt like a forearm shiver thinking about how my Uber Driving will effect my tax return total.....
> Does anyone know if Uber deducts state & federal taxes from your fares before they're paid out? Since I'm an "independent contractor" will my hard paid taxes dollars take a beating? I've also heard that we (as drivers) may be able to write off gas as an expense, does anyone know if that's true? Are there expenses that I may be able to write off that I'm not aware of? A friend of mine who works in pharm sales said her company gives her "x" amount of money per mile she drives for work & since that amount is less than "state minimum" (kind of like state minimum hourly wage vs state minimum hourly wage for bartenders or servers) the state will make up for the gap between the two in her return refund. Is that for real?
> I'm not asking anyone to be my "tax professional" here I'm just looking to hear y'all's tax experiences & maybe get some advice as a first timer lol


Yikes. There is a ton of info online about this.

As a 1099 contractor you will receive 1099s for all income, and NOTHING is taken out for taxes.

You are a BUSINESS, so you need to write off all business expenses on schedule C, and this I course either gas/maint or mileage.

And you are mis-interpreting what your friends mileage issue is.

You are in the hook for paying all federal, & state income taxes AND self employment taxes.

You could end up paying more in tax than you have left over from driving if you don't manage this right. You need to consult with a CPA at the very least.


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## Merc7186 (Jul 8, 2017)

....and here lies the problem with Uber is that anybody thinks they can do it then does not realize what it means to be an independent contractor or do any research ahead of time.

I personally don't pay Quarterlys because I have plenty taken out of my salary now but this goes to show how many unprepared people there are when it comes to Uber. The OP is in a new market and I can guarantee is in the same boat as a lot of new drivers. Thankfully, it will be less competition for me once they realize that they have screwed themselves by doing no research ahead of time and end up owing the government a little chunk of change that they can't afford.

TurboTax Small Business FTW.


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## SouthernYankee07 (Sep 20, 2017)

SEAL Team 5 said:


> Just by this question I can tell that you really don't have a clue about taxes and being self employed.


Really, what gave me away? LoL.

Thank you for the VERY helpful advice, I do sincerely appreciate you taking the time to help a lady/first timer out, and all the specific details are above & beyond which I'm even more grateful for.

Seal Team 5...... I'm not sure if it's really S.O.P. here but thank you for your service!! You're a ton more brave than I could ever even hope to be, you're a TRUE American hero & I couldn't just leave this post with out at lease saying this small thank you.



Chris1973 said:


> With a pretty face like that why are you worrying about taxes and driving Uber?.


Thank you for the compliment but how could I NOT be worried? I don't want to have to pay out more than I'm getting back (I presume I'm in the majority here) but at this point I'm a little nervous that I'll even break even. I consider myself to be really good when it comes to money, like I kind of explained in my original post, I use (or I should now say HAVE used....past tense) my tax return money to pay off Christmas & other lingering items on my credit card. I'd be lying if I said some of that money doesn't go to "non essential/non practical" stuff too & I do look forward to my little me spree in January February. LoL.


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## SouthernYankee07 (Sep 20, 2017)

Merc7186 said:


> ....and here lies the problem with Uber is that anybody thinks they can do it then does not realize what it means to be an independent contractor or do any research ahead of time.
> 
> I have plenty taken out of my salary now Thankfully, it will be less competition for me once they realize that they have screwed themselves by doing no research ahead of time and end up owing the government a little chunk of change that they can't afford.


I did a little research but since Western New York was a new market there wasn't much available for me (NYC is a whole separate entity from the rest of the state & so are their taxes). What I COULD find I did what you have done in that I had more taken from my salary of my full time job, Uber is just a part time thing for me, but I'm still concerned that I didn't relinquish enough. 
I'm in the same hopes as you are in, that some drivers will deactivate once Uncle Sam sticks his big ol hands in their pockets, and the the rest of us will flourish.


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## UberTaxPro (Oct 3, 2014)

SouthernYankee07 said:


> Today as I swiped my credit card for, what I hope will be, the last of my Christmas shopping I couldn't help thinking how my tax return is going to take one hell of a shot with all the damage I've done to it lately. Then, just like the blast my tax return is going to have to take for the team, I got what felt like a forearm shiver thinking about how my Uber Driving will effect my tax return total.....
> Does anyone know if Uber deducts state & federal taxes from your fares before they're paid out? Since I'm an "independent contractor" will my hard paid taxes dollars take a beating? I've also heard that we (as drivers) may be able to write off gas as an expense, does anyone know if that's true? Are there expenses that I may be able to write off that I'm not aware of? A friend of mine who works in pharm sales said her company gives her "x" amount of money per mile she drives for work & since that amount is less than "state minimum" (kind of like state minimum hourly wage vs state minimum hourly wage for bartenders or servers) the state will make up for the gap between the two in her return refund. Is that for real?
> I'm not asking anyone to be my "tax professional" here I'm just looking to hear y'all's tax experiences & maybe get some advice as a first timer lol


It doesn't sound like you've been keeping a mileage log so I would suggest that you start doing that immediately if you plan on continuing with ride-share driving. It might not be to late for you to re-create a mileage log for 2017. Spending a day re-creating your log will be worth more to you than a day of driving so do that before your next fare and continue keeping a contemporaneously log from today going forward into next year. The mileage log will be your BFF at tax time. You can use pen and paper or a fancy phone app for the log.


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## Mars Troll Number 4 (Oct 30, 2015)

SouthernYankee07 said:


> I did a little research but since Western New York was a new market there wasn't much available for me (NYC is a whole separate entity from the rest of the state & so are their taxes). What I COULD find I did what you have done in that I had more taken from my salary of my full time job, Uber is just a part time thing for me, but I'm still concerned that I didn't relinquish enough.
> I'm in the same hopes as you are in, that some drivers will deactivate once Uncle Sam sticks his big ol hands in their pockets, and the the rest of us will flourish.


You increased your withholding to compensate for the extra income your earning?

That's the smart way to do it.

You really do need a mileage log thou, there's no way around it.

By the letter of the law you can't write off anything without a mileage log.

Uber drivers and taxi drivers NEVER get a tax refund, the first year is usually when the new drivers are in a massive panic over how screwed they are.

Some people literly have no documentation of their expenses, and paid nothing in all year...

You're WAY ahead of the game...

What you NEED to do is to estimate how many miles you need to drive for each dolllar you earn and make something up in terms of a log.

If not you will be paying taxes LIKE all your revenue was straight profit. Which is really getting the short end of the stick.


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## SouthernYankee07 (Sep 20, 2017)

Mears Troll Number 4 said:


> You increased your withholding to compensate for the extra income your earning?
> 
> That's the smart way to do it.
> 
> You're WAY ahead of the game...





Mears Troll Number 4 said:


> You increased your withholding to compensate for the extra income your earning?
> 
> That's the smart way to do it.
> 
> ...





Mears Troll Number 4 said:


> You increased your withholding to compensate for the extra income your earning?
> 
> That's the smart way to do it.
> 
> ...


Thank you for the compliments, I tried to do what I thought might be best to "offset" my extra income, but now I'm hoping, wishing AND praying my deductive reasoning didn't end up ROYALLY destroying me. Like I mentioned before, at this point, I'll be happy to just break even.

I kept a pretty good log book, it was advice given to me by friends & Uber, but I'll probably end up spending a good chunk of time going through it, comparing it to my Uber logs of payment details of mileage, and making necessary adjustments. Again, advice given to me on here, but I'm still wondering if I can deduct gas as a "business expense"? Can I also write off small things like oil changes, tire rotation, car washes, getting the interior of my car detailed, maybe throw in some thing like wear & tear on my vehicle as some spice, etc (with receipts provided of course)?

Thank goodness my Grad program learned me how to master research along with my own deductive reasoning or else I'd be up the creek with the rest of those fools LMFAO That's where all the credit goes to for my being "WAY ahead of the game". LoL.

Any other insights or advice for me? (Legit question).


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## Mars Troll Number 4 (Oct 30, 2015)

SouthernYankee07 said:


> Thank you for the compliments, I tried to do what I thought might be best to "offset" my extra income, but now I'm hoping, wishing AND praying my deductive reasoning didn't end up ROYALLY destroying me. Like I mentioned before, at this point, I'll be happy to just break even.
> 
> I kept a pretty good log book, it was advice given to me by friends & Uber, but I'll probably end up spending a good chunk of time going through it, comparing it to my Uber logs of payment details of mileage, and making necessary adjustments. Again, advice given to me on here, but I'm still wondering if I can deduct gas as a "business expense"? Can I also write off small things like oil changes, tire rotation, car washes, getting the interior of my car detailed, maybe throw in some thing like wear & tear on my vehicle as some spice, etc (with receipts provided of course)?
> 
> ...


you can deduct either... 53.5c per business mile,

or
the proportion of business mile to personal mile of your actual expenses *IE gas, oil changes ect*.
So if 80% of your miles are for business you can write off 80% of all your gas purchased, every oil change ect.

Either option you _*need*_ a log of the miles you have driven.

Usually, unless you are using a very high end car, Mileage makes you come out on top, compared to deducting your actual expenses. You can also write off a portion of your phone bill (1/2 of one phone line) as well. I know for me that's another $50 a month, or $600 annually.

If for instance your on a family plan, with 4 people, you can deduct 1/8th your total bill. (1/2 of 1/4th)

All math below is complete BS, it's an example of how to do it.

The "easy" way to fabricate a log is figure out how many miles it takes to make $1.00 +- 10%.

So for January 1st you made $84 and on average it takes you 1.6 miles total driven to make $1.00.

So you multiply 84 X 1.6 and you have 134.4 miles

Multiple that by .0X (dice roll)
Then flip a coin and add or subtract that figure from the total miles for the day.

So you roll a 4 so multiply it by .04 = 5 miles

Now you have 140 miles on January 1st.

January 2, $96
96 X 1.6 =153 miles
Roll a 2

153 X .02 = 3

flip a coin- tails.

150 miles for January 2

Rinse and repeat and keep changing ink colors/types of pens.

Then when you get to the end of the year attach your log to a dog or small child and chase them around the yard or park for a while. This will "age" your log. you absolutly can't have a neat and tidy log that looks like it's fresh from the store.

If you get audited you will have to play stupid. Show how many miles you drove each day. This isn't 100% correct but considering you can't make money without driving it puts you in much better shape. People screw up stuff like this ALL THE TIME, it's people who have no log that are fubar.

The end result is a log that is not consistent day to day but consistent enough that it's consistentish

You don't the number of miles per $ to be spot on from day to day, and you want it to *feel* like you have been keeping it all year long.


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## UberTaxPro (Oct 3, 2014)

SouthernYankee07 said:


> but I'm still wondering if I can deduct gas as a "business expense"? Can I also write off small things like oil changes, tire rotation, car washes, getting the interior of my car detailed, maybe throw in some thing like wear & tear on my vehicle as some spice, etc (with receipts provided of course)?


Since you like to research, here is some good reading for you to start with on this topic:
https://www.irs.gov/pub/irs-pdf/p463.pdf
https://www.irs.gov/newsroom/car-and-truck-expense-deduction-reminders

Basically you've got two ways under the tax law to deduct vehicle expenses.

1. Actual expenses - With this method you can deduct the business % of all the expenses you mentioned including some spice like depreciation.
1. Standard Mileage Rate - With this method you use the IRS provided Standard Mileage Rate to deduct all of your vehicle expenses. All the vehicle expenses you mentioned like oil changes, tire rotation, car washes and detailing and extra spice are included in the SMR. You can deduct non vehicle related expenses in addition to the SMR like cell phone, pax goodies etc...
You may be able to get away with deducting car washing and detailing that go way beyond the norm if they are done for pax comfort. It's a gray area but the argument has merit if you don't try to deduct all the car washes. I would include a statement to explain any car wash or detailing deductions when using the SMR.



SouthernYankee07 said:


> *The Tax Man Is Coming, The Tax Man Is Coming, THE TAX MAN IS COMING!!*


I had to laugh when I saw your heading!!! I used to work for this guy.... http://www.thetaxmanwappingersfallsny.com/ He's retired now.


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## Older Chauffeur (Oct 16, 2014)

I've been keeping mileage logs in At-A-Glance Weekly calendars since 2003, using rollerball pens with black ink until this year. The ink shows through the page, making it a bit messy, so I have now begun using a mechanical pencil. The book sits on my desk, so it has no need to look like it's been anywhere else. If I get audited, I can show them fifteen years of contemporaneous logs. The one from this year just looks neater. I also track medical related mileage in the same calendar, so I'm about as ready as I can get.


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## Mars Troll Number 4 (Oct 30, 2015)

UberTaxPro said:


> Since you like to research, here is some good reading for you to start with on this topic:
> https://www.irs.gov/pub/irs-pdf/p463.pdf
> https://www.irs.gov/newsroom/car-and-truck-expense-deduction-reminders
> 
> ...


I know a few guys who write off bikini carwashes as "detailing" but the taxi drivers write off for actual expenses. If your doing actual expenses any detailing you pay for can get written off I beleive. It's a cost of doing business.

Personally i think i can do a better job with the vacuum in my garage.

As far as detailing, any time your getting passenger related messes cleaned you can write that off.

IE your paying to have vomit professional cleaned.


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## AuxCordBoston (Dec 3, 2016)

Mears Troll Number 4 said:


> you can deduct either... 53.5c per business mile,
> 
> or
> the proportion of business mile to personal mile of your actual expenses *IE gas, oil changes ect*.
> ...


The big big question is whether any Uber driver has actually been audited by the IRS. That's what I'd like to know.


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## UberTaxPro (Oct 3, 2014)

AuxCordBoston said:


> The big big question is whether any Uber driver has actually been audited by the IRS. That's what I'd like to know.


Hell yea! Some high earners have been known to moonlight a little Uber every once in while. 




Seriously, Mears Troll Number 4 got audited over his taxi driving I think


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## Mars Troll Number 4 (Oct 30, 2015)

UberTaxPro said:


> Hell yea! Some high earners have been known to moonlight a little Uber every once in while.
> 
> 
> 
> ...


One time was really intensive, the other was a asking me for one month of gasoline purchases to justify my mileage.


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## UberTaxPro (Oct 3, 2014)

Mears Troll Number 4 said:


> One time was really intensive, the other was a asking me for one month of gasoline purchases to justify my mileage.


So it's a good idea to keep gas receipts even if you're using the SMR.? I would. It's really pretty easy these days...just use a debit or credit card for all business purchases.


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## Mars Troll Number 4 (Oct 30, 2015)

UberTaxPro said:


> So it's a good idea to keep gas receipts even if you're using the SMR.? I would. It's really pretty easy these days...just use a debit or credit card for all business purchases.


One was a phone interview. (they sent a certified letter asking me to contact them) there was some concern over the number of miles i was claiming. They gave it in a list of options, i think the other was to get a notarized statement of my Current Odometer reading, or service records from a reputable dealership.

I took a brand new car and put like 50,000 miles in 9 months. They looked at my log and called BS on it.

One month of credit card receipts was like a 5 minute job.


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## AuxCordBoston (Dec 3, 2016)

Mears Troll Number 4 said:


> One was a phone interview. (they sent a certified letter asking me to contact them) there was some concern over the number of miles i was claiming. They gave it in a list of options, i think the other was to get a notarized statement of my Current Odometer reading, or service records from a reputable dealership.
> 
> I took a brand new car and put like 50,000 miles in 9 months. They looked at my log and called BS on it.
> 
> One month of credit card receipts was like a 5 minute job.


Were you audited for just Uber or other things


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## Mars Troll Number 4 (Oct 30, 2015)

AuxCordBoston said:


> Were you audited for just Uber or other things


That was taxi income/expenses.

Honestly Uber is probably a higher risk of an audit as the profit margins are so much lower.


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