# How soon after Purchasing a New Car "must" you sign up with Uber for deduction purposes ?



## SeattleBlue (Dec 13, 2016)

I am going to buy or lease a New Honda Crv. If I buy the car on Jan 1 2017 and do not sign up with Uber or some type of Amazon Prime delivery service .... until ...March 1 - Can I still take the section 179 tax deduction of aproximately 11,000 the first year ? ..or.... must I sign up as a 1099 independent contractor before buying the car. Anyone know a good 1099 CPA in Seattle ? I guess there also may be "depreciation" that is a deductible expense . Either way it looks like I have to go the "expenses" route instead of the mileage route . I give up the "per mile" exemption with the expenses method but it seems the expense of a new Car would be a lot more advantageous.


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## LAuberX (Jun 3, 2014)

the standard mileage deduction is usually the best when driving for Uber. 

Log your odometer daily and use the standard mileage deduction at years end.

even part time Uber drivers can log 20,000 "business miles".

with the low pay and logging all your dead miles this gig is tax free in most cities.


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## UberTaxPro (Oct 3, 2014)

SeattleBlue said:


> I am going to buy or lease a New Honda Crv. If I buy the car on Jan 1 2017 and do not sign up with Uber or some type of Amazon Prime delivery service .... until ...March 1 - Can I still take the section 179 tax deduction of aproximately 11,000 the first year ? ..or.... must I sign up as a 1099 independent contractor before buying the car. Anyone know a good 1099 CPA in Seattle ? I guess there also may be "depreciation" that is a deductible expense . Either way it looks like I have to go the "expenses" route instead of the mileage route . I give up the "per mile" exemption with the expenses method but it seems the expense of a new Car would be a lot more advantageous.


The vehicle must be placed in service during the tax year that you claim the section 179 deduction. So for your first question...yes. Remember the equipment has to be used at least 50% for business and you can only deduct the business use %. Why do you have to go that route?


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## SeattleBlue (Dec 13, 2016)

LauberX Thanks , One other question please .
Suppose I go the mileage route for deduction - I take a Ping at 6am .....then drive to school in edmonds from Seattle At 10am ...then take another ping . Then later drive to the Coffee shop for a latte and finally take one last ping after that . Do I have to log the start and end times and mileage for EACH ping - making sure to subtract or somehow note that the car was used for personal use for the drive to edmonds & the Coffee shop ?


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## SeattleBlue (Dec 13, 2016)

UberTaxPro Thanks for the Reply , why ? - Because I have read a few posts here , that say that if you buy a new car and use the section 179 deduction you get a good first year deduction of like an additional 11000 over the standard depreciation that you get with the Standard Mileage deduction . Not sure how much I'll be driving so the 179 deduction may not be necessary ...perhaps for the first year I can do both and then decide at the End of the Year which was best ? Not sure if that's allowed or you have to claim method ...either mileage or expenses at the start of the year ?


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## SeattleBlue (Dec 13, 2016)

By the way - How questionable would it be - that since I have to go to School in edmonda 2x a week for school - that I just turn my App on and drive up there and then after class I take a ping . The last thing I want to do in the entire world is put myself in trouble with the IRS ...but that would be a Way so that my personal miles on the car was lessened .. I could also drive up to Edmonds before class and take a ping [if that's realistic to expect to always get a ping] and then go to class afterwards . Think the IRS might have a problem with that ? I don't want to be in the spot where I get audited and the IRS looks at my uber records and see's I drove to Edmonds every monday and wednesday at 9am and claimed I was working ....UNLESS ....taking a ping up there would be considered still in compliance with the law.

hmmmmm..well thinking about it ...I don't see how they could object to taking a Ping BACK to seattle After my Class ! So just turn on the app in Edmonds and then hopefully get a ping that goes south toward or into Seattle.


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## UberTaxPro (Oct 3, 2014)

SeattleBlue said:


> UberTaxPro Thanks for the Reply , why ? - Because I have read a few posts here , that say that if you buy a new car and use the section 179 deduction you get a good first year deduction of like an additional 11000 over the standard depreciation that you get with the Standard Mileage deduction . Not sure how much I'll be driving so the 179 deduction may not be necessary ...perhaps for the first year I can do both and then decide at the End of the Year which was best ? Not sure if that's allowed or you have to claim method ...either mileage or expenses at the start of the year ?


You don't have to decide till the end of the year. The problem is not the first year it's the years after that. The section 179 is basically taking advanced depreciation so if you go out of business or start using the vehicle less than 50% for business before the depreciation period ends you'll have to recapture the 179 deduction as ordinary income. Also, once you start using the actual expense method you can't switch to the mileage method with the same vehicle ever. The mileage method should give you enough to get your tax liability close to or less than 0 and its easier for you as far as record keeping goes. You should really think through the section 179 thing before you jump in!


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## SeattleBlue (Dec 13, 2016)

UbertaxPro - Thanks - That "recapture" does look pretty grungy for me ...can't predict the future . Mileage method starting to look like the best for me.


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## UberTaxPro (Oct 3, 2014)

SeattleBlue said:


> By the way - How questionable would it be - that since I have to go to School in edmonda 2x a week for school - that I just turn my App on and drive up there and then after class I take a ping . The last thing I want to do in the entire world is put myself in trouble with the IRS ...but that would be a Way so that my personal miles on the car was lessened .. I could also drive up to Edmonds before class and take a ping [if that's realistic to expect to always get a ping] and then go to class afterwards . Think the IRS might have a problem with that ? I don't want to be in the spot where I get audited and the IRS looks at my uber records and see's I drove to Edmonds every monday and wednesday at 9am and claimed I was working ....UNLESS ....taking a ping up there would be considered still in compliance with the law.
> 
> hmmmmm..well thinking about it ...I don't see how they could object to taking a Ping BACK to seattle After my Class ! So just turn on the app in Edmonds and then hopefully get a ping that goes south toward or into Seattle.


"How questionable would it be" very questionable
"Think the IRS might have a problem with that ?" Yes, they might.

In my opinion you'd need to do a substantial amount of trips up and back to justify ALL those miles as "business miles". If you could average $10 or $20 an hour on the trip I'd be OK with it, otherwise it would be tough to justify all those miles as business miles.


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## SeattleBlue (Dec 13, 2016)

UbertaxPro - Yeah it seems like the trip up to edmonds could not be justified ...but the trip back could be ...if I took a Ping back towards Seattle ... or maybe a couple pings back ...if I get stuck up in Edmonds making several pings ..I guess that would be ok too...at least I would be making some money and eventually I would either get close to Seattle or just go home and somehow count the miles back ...as some kind of "back to base" miles.


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

SeattleBlue said:


> UbertaxPro - Thanks - That "recapture" does look pretty grungy for me ...can't predict the future . Mileage method starting to look like the best for me.


The last indy taxi i ran (i kept it on the road for 200,000 miles) the per mile deduction was (just barely) more than enough to cover my actual expenses for the entire life of the vehicle including the entire purchase cost and all maintenance over the life of the car.


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