# Estimating taxes



## FinerThings (Aug 13, 2018)

How do I know how much of my earnings to put back so I'll be able to pay my taxes?

Thanks!


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## Older Chauffeur (Oct 16, 2014)

FinerThings said:


> How do I know how much of my earnings to put back so I'll be able to pay my taxes?
> 
> Thanks!


If you are keeping a good mileage log and tracking other deductible things such as cellphone bills (percentage applicable to business use, just like the mileage) you probably won't have a lot of taxable profit. It can vary depending on several factors. If you have regular employment where taxes are withheld, you can increase that witholding a bit to play safe. Also if you usually get a refund at tax time ridesharing may reduce that refund if you actually turn a profit. If you have at least $400 in net profit you will owe 15.3% in self employment taxes, similar to FICA taxes paid by you and your employer in a regular job.

Disclosure: I'm not a tax professional.


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## FinerThings (Aug 13, 2018)

Thank you. I'm on disability and never owe taxes at tax time. No refund, no payment, no nothing.


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## vtcomics (Oct 9, 2018)

Older Chauffeur said:


> If you are keeping a good mileage log and tracking other deductible things such as cellphone bills (percentage applicable to business use, just like the mileage) you probably won't have a lot of taxable profit. It can vary depending on several factors. If you have regular employment where taxes are withheld, you can increase that witholding a bit to play safe. Also if you usually get a refund at tax time ridesharing may reduce that refund if you actually turn a profit. If you have at least $400 in net profit you will owe 15.3% in self employment taxes, similar to FICA taxes paid by you and your employer in a regular job.
> 
> Disclosure: I'm not a tax professional.


I couldn't remember if the 15.3% self employment tax was on gross or net?


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## SEAL Team 5 (Dec 19, 2015)

vtcomics said:


> I couldn't remember if the 15.3% self employment tax was on gross or net?


It's on net, after all cost.


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## SamuelB (Aug 29, 2018)

A rough way to figure if you file as single and do not itemize on schedule A:
((1099 Earnings - ((Total Business Miles X $0.545) + Other Business Deduction) + Taxable Income from other sources) - $12,000 Standard Deduction = Taxable Income.
You will basically file a schedule C where you will put your earnings. There you will reduce your income by subtracting deductions. Your biggest deduction will be mileage which is calculated at $0.545/mile. You will also deduct other business expenses. You can google what expenses are deductible. You will also file a Schedule SE which will figure out your Self-Employment tax which is for Medicare and Social Security. That is 15.3% of your net earnings. You will transfer the net earnings from schedule C to your main tax form. There you combine it with any other taxable income you have (like earnings from a job where you get a w-2). If you are not itemizing then you can subtract the standard deduction which is $12,000 for 2018. That is the income you will be taxed on (+/- and other adjustments made on your main tax form). Check the tax chart and it will tell you how much you owe. Remember...it is taxable income which is net (reduced by deductions). If your taxable income stays below $12,000, you won't owe any federal taxes.


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## EngineerAtHeart (Nov 8, 2018)

This is my first year Ubering part-time, so I have set aside roughly 20% ($5,000) of my gross income ($25,000) to cover any taxes (State and Federal). I know I won't pay that much, especially since the standard deduction is now $12,000 (Single, no kids, and no property). I actively try to keep my expenses low (why pay $1 on the $1 vs $.20 on the $1). So expenses currently are about $16,000. I don't supply gum or water, honestly no ones ever asked, so that helps. 

My expenses include mileage (+tolls), food, business % of car payment (business miles / total miles), car washes, equipment.


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## UberTaxPro (Oct 3, 2014)

EngineerAtHeart said:


> This is my first year Ubering part-time, so I have set aside roughly 20% ($5,000) of my gross income ($25,000) to cover any taxes (State and Federal). I know I won't pay that much, especially since the standard deduction is now $12,000 (Single, no kids, and no property). I actively try to keep my expenses low (why pay $1 on the $1 vs $.20 on the $1). So expenses currently are about $16,000. I don't supply gum or water, honestly no ones ever asked, so that helps.
> 
> My expenses include mileage (+tolls), food, business % of car payment (business miles / total miles), car washes, equipment.


You'll need to pick the Standard Mileage Rate or actual expenses come tax time. If you select the SMR your mileage expense will be approximately 90 to 99% of your total deductions. Many of the items you mentioned are built into the SMR and not deductible in addition to the SMR.


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

EngineerAtHeart said:


> This is my first year Ubering part-time, so I have set aside roughly 20% ($5,000) of my gross income ($25,000) to cover any taxes (State and Federal). I know I won't pay that much, especially since the standard deduction is now $12,000 (Single, no kids, and no property). I actively try to keep my expenses low (why pay $1 on the $1 vs $.20 on the $1). So expenses currently are about $16,000. I don't supply gum or water, honestly no ones ever asked, so that helps.
> 
> My expenses include mileage (+tolls), food, business % of car payment (business miles / total miles), car washes, equipment.


How many miles are on your mileage log?

$5,000 should be more than enough to cover it IMHO


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## vtcomics (Oct 9, 2018)

UberTaxPro said:


> You'll need to pick the Standard Mileage Rate or actual expenses come tax time. If you select the SMR your mileage expense will be approximately 90 to 99% of your total deductions. Many of the items you mentioned are built into the SMR and not deductible in addition to the SMR.


Does this mean he can't take both the $12k standard deduction and the SMR deduction??? Doesn't the SMR come off during the Business income and expense form and the net then gets applied as income?


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## Older Chauffeur (Oct 16, 2014)

vtcomics said:


> Does this mean he can't take both the $12k standard deduction and the SMR deduction??? Doesn't the SMR come off during the Business income and expense form and the net then gets applied as income?


You have it right in your second question. He still gets the Standard Deduction of $12k, which has nothing to do with the business SMR.

Disclosure, I'm not a tax professional.


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## UberTaxPro (Oct 3, 2014)

vtcomics said:


> Does this mean he can't take both the $12k standard deduction and the SMR deduction??? Doesn't the SMR come off during the Business income and expense form and the net then gets applied as income?


Older Chauffeur I agree
SMR is a business deduction for ride share drivers- deducted on schedule C
Standard deduction is a personal deduction- everybody gets it on form 1040


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## EngineerAtHeart (Nov 8, 2018)

UberTaxPro said:


> Older Chauffeur I agree
> SMR is a business deduction for ride share drivers- deducted on schedule C
> Standard deduction is a personal deduction- everybody gets it on form 1040


From my day job I'm in the 24% bracket, but wouldn't the tax refund from my 1040 personal deduction then go towards my tax liability, and effectively (nearly) cancel them out?


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## Pax Collector (Feb 18, 2018)

Use the standard mileage deduction and declare a loss. The IRS wouldn't have a hard time believing that you actually lost money driving rideshare.


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## UberTaxPro (Oct 3, 2014)

EngineerAtHeart said:


> From my day job I'm in the 24% bracket, but wouldn't the tax refund from my 1040 personal deduction then go towards my tax liability, and effectively (nearly) cancel them out?


Yes it could, depends on the actual numbers. I often recommend that ride-share drivers increase increase withholding from W-2 jobs to cover any tax liability that ride-share might bring on.



Pax Collector said:


> Use the standard mileage deduction and declare a loss. The IRS wouldn't have a hard time believing that you actually lost money driving rideshare.


Not a problem as long as you have records, most importantly a mileage log.


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## Pax Collector (Feb 18, 2018)

UberTaxPro said:


> Not a problem as long as you have records, most importantly a mileage log.


Yep. I got stacks of mileage logs.


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## SamuelB (Aug 29, 2018)

EngineerAtHeart said:


> From my day job I'm in the 24% bracket, but wouldn't the tax refund from my 1040 personal deduction then go towards my tax liability, and effectively (nearly) cancel them out?


That's not really how you look at it. When you do your taxes on form 1040 (This is 2017 form 1040. 2018 will be different https://www.irs.gov/pub/irs-pdf/f1040.pdf) the first section is where you determine your income. You enter all your W-2 income on line 7. You will use Schedule C to figure out your business income. That is where you will list all your 1099 income and deduct all your expenses leaving you with a profit or loss that you will transfer to line 12 on the 1040. You will also add in other sources of income like capital gains. That first section will tell you what your total income (line 22.
The next section takes your total income and may reduce it some and leave you with your Adjusted Gross Income on line 37. After you figure your income from all your sources you then take your deductions. If you itemize you will subtract your total deduction from Schedule A. If you don't itemize you will reduce your income by the standard deduction which is $12,000 if you filing single. There is no longer a personal exemption. What is left is your taxable income which you look up in the tax tables to see how much you owe. Once you know your tax you will then compare that to how much has been withheld from your W-2 employment and then you will see how much of a refund you get or how much you will have to pay. If you get money back, great. If you have to pay you need to look at increasing your withholding on your W-2 employment to cover your additional 1099 income.

There are requirements that may require you to file quarterly taxes you should know about.

Take a look at Turbotax online. It literally walks you through everything

I am not a tax professional and I don't play one on TV.


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## Squeaking Lion (Nov 11, 2018)

This will be my first year dealing with taxes on rideshare... doesn't Uber send you a mileage total along with your 1099? They're supposed to. I'm just wondering why I should be keeping my own set of mileage logs? (I haven't been... and am now worried that I haven't been)


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## Uberbrent (Mar 22, 2016)

Mainly because the mileage that Uber sends you is only on the actual trip. Do you drive any at all with the app on? That isn't included in their figures. Nice app for this is MileIQ.


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## Squeaking Lion (Nov 11, 2018)

Hmmm... you know, I never thought about that. So they don't track the miles they have you travel to the fare, even when they give you the Premium trip bonus? It makes sense that the mileage to the fare would also be a business expense. I'll look into MileIQ. Thanks.


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## UberTaxPro (Oct 3, 2014)

Squeaking Lion said:


> This will be my first year dealing with taxes on rideshare... doesn't Uber send you a mileage total along with your 1099? They're supposed to. I'm just wondering why I should be keeping my own set of mileage logs? (I haven't been... and am now worried that I haven't been)


The IRS, pursuant to statutory provision, requires that *you*, not Uber, keep a mileage log.
"Business expense deductions, like all tax deductions, are a matter of legislative grace, and the taxpayer bears the burden of proving his entitlement to any deduction. This burden requires the taxpayer to demonstrate that the claimed deductions are allowable pursuant to some statutory provision and to substantiate the expenses giving rise to the claimed deductions by maintaining and producing adequate records that enable the Commissioner to determine the taxpayer's correct liability"
From a recent tax court case: https://www.ustaxcourt.gov/UstcInOp/OpinionViewer.aspx?ID=11818 Taxpayers vehicle deductions were denied due to inadequate records.


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## Skinny1 (Sep 24, 2015)

Here's an example of my daily going back 3 years.....
Above is X driving only.


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## Older Chauffeur (Oct 16, 2014)

UberTaxPro said:


> The IRS, pursuant to statutory provision, requires that *you*, not Uber, keep a mileage log.
> "Business expense deductions, like all tax deductions, are a matter of legislative grace, and the taxpayer bears the burden of proving his entitlement to any deduction. This burden requires the taxpayer to demonstrate that the claimed deductions are allowable pursuant to some statutory provision and to substantiate the expenses giving rise to the claimed deductions by maintaining and producing adequate records that enable the Commissioner to determine the taxpayer's correct liability"
> From a recent tax court case: https://www.ustaxcourt.gov/UstcInOp/OpinionViewer.aspx?ID=11818 Taxpayers vehicle deductions were denied due to inadequate records.


Looks like this lawyer outsmarted himself.


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## Squeaking Lion (Nov 11, 2018)

UberTaxPro said:


> The IRS, pursuant to statutory provision, requires that *you*, not Uber, keep a mileage log.
> "Business expense deductions, like all tax deductions, are a matter of legislative grace, and the taxpayer bears the burden of proving his entitlement to any deduction. This burden requires the taxpayer to demonstrate that the claimed deductions are allowable pursuant to some statutory provision and to substantiate the expenses giving rise to the claimed deductions by maintaining and producing adequate records that enable the Commissioner to determine the taxpayer's correct liability"
> From a recent tax court case: https://www.ustaxcourt.gov/UstcInOp/OpinionViewer.aspx?ID=11818 Taxpayers vehicle deductions were denied due to inadequate records.


Well... nuts. Looks like this year might be a bit skimpy on tax deductions....


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## EngineerAtHeart (Nov 8, 2018)

Squeaking Lion said:


> Hmmm... you know, I never thought about that. So they don't track the miles they have you travel to the fare, even when they give you the Premium trip bonus? It makes sense that the mileage to the fare would also be a business expense. I'll look into MileIQ. Thanks.


MileIQ is about $6.50 / month but will probably double your mileage write-off. Definitely worth it and you don't have to keep track of the mileage yourself. Just categorize the trips every few days or so.


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## Uberbrent (Mar 22, 2016)

The cost of the MileIQ app is also a tax deduction. Tax accountant highly suggested it.


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## UberTaxPro (Oct 3, 2014)

I use Triplog for $2 month


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