# Tax right offs



## bmwuber (Apr 6, 2015)

I want to join the rideshare community! My current question is regarding taxes. Can I write off my insurance and car payments?? What else can i write off? gas? water? My car is a lease. I'm young, new to rideshare, and new to taxes, so please help!!


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## DrJeecheroo (Feb 12, 2015)

Gas yes. Water I don't think so. Ask desert driver on other possibilities.


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## Older Chauffeur (Oct 16, 2014)

bmwuber said:


> I want to join the rideshare community! My current question is regarding taxes. Can I write off my insurance and car payments?? What else can i write off? gas? water? I'm young, new to rideshare, and new to taxes, so please help!!


You can search these forums for tax info, but basically you will do best by using the IRS approved per mile deduction of $.575 for all business related driving, including dead miles. That covers all the usual car expenses including maintenance, depreciation, fuel, etc. This makes it easy, and you don't need receipts, but rather an accurate mileage log showing start/finish odometer readings. The only time you can write off payments is if you lease the car, in which case I believe you then track all other expenses related to the car and keep receipts for everything you want to write off. The water provided for customers is probably OK, but keep the receipts for that, along with any tolls or parking fees, which aren't included in the per mile rate. If done right, you won't show much taxable income, but you will be trading your equity in your car for what amounts to minimum wage.


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## Fatjoe (Oct 17, 2014)

How will taxes work if you make 70-75 at your other job?? I'm not trying to screw up our 5k typical return we get....if I made 1000-1200 a month doing uber do u think it would be a wash with the mileage??? Meaning I would still get our typical 5k tax return??


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## bmwuber (Apr 6, 2015)

Older Chauffeur said:


> You can search these forums for tax info, but basically you will do best by using the IRS approved per mile deduction of $.575 for all business related driving, including dead miles. That covers all the usual car expenses including maintenance, depreciation, fuel, etc. This makes it easy, and you don't need receipts, but rather an accurate mileage log showing start/finish odometer readings. The only time you can write off payments is if you lease the car, in which case I believe you then track all other expenses related to the car and keep receipts for everything you want to write off. The water provided for customers is probably OK, but keep the receipts for that, along with any tolls or parking fees, which aren't included in the per mile rate. If done right, you won't show much taxable income, but you will be trading your equity in your car for what amounts to minimum wage.


My car is a lease! so I guess i can write off the payments and not the miles? or can i do both?


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## bmwuber (Apr 6, 2015)

Fatjoe said:


> How will taxes work if you make 70-75 at your other job?? I'm not trying to screw up our 5k typical return we get....if I made 1000-1200 a month doing uber do u think it would be a wash with the mileage??? Meaning I would still get our typical 5k tax return??


I'm still in school and have never really worked a job that has made more than 10/hr.


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## Desert Driver (Nov 9, 2014)

bmwuber said:


> I want to join the rideshare community! My current question is regarding taxes. Can I write off my insurance and car payments?? What else can i write off? gas? water? My car is a lease. I'm young, new to rideshare, and new to taxes, so please help!!


What us your mileage limit on your lease? You're going to rack up miles quickly.


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## bmwuber (Apr 6, 2015)

Desert Driver said:


> What us your mileage limit on your lease? You're going to rack up miles quickly.


limit is 12,000 per year. I'm under milage now. Plus I'm not really worried about mileage as the cost of 1 mile over lease is much less than the price per mile paid out by uber.


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## Older Chauffeur (Oct 16, 2014)

Fatjoe said:


> How will taxes work if you make 70-75 at your other job?? I'm not trying to screw up our 5k typical return we get....if I made 1000-1200 a month doing uber do u think it would be a wash with the mileage??? Meaning I would still get our typical 5k tax return??


Do you mean tax *refund* ? You need to consult a tax professional to discuss your particular situation.


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## Fuzzyelvis (Dec 7, 2014)

bmwuber said:


> I'm still in school and have never really worked a job that has made more than 10/hr.


And you think ubering will?

We'll depend on your car and market. But don't believe the Craigslist afs.

My advice: keep track of all mileage. Go to office Depot and get mileage log and write down everything. There is discussion here about whether driving to and from the area you plan to work in is deductible if the app is not on. The IRS has not spoken on this yet so for now I keep that separate but mark it as going to uber.

Anytime the app is on (if you put it on in your driveway and take runs then the above doesn't matter--but probably at some point you'll be far from home and tired and turn it off so keep that separate. 
If you end up outside of town and turn it off to get back I would put that as driving to uber FOR NOW. I would expect that will definitely be deductible but am keeping track just in case.

ANYTHING not driving to uber or with the app on is personal.

So I have 3 categories for this. Which may be 2 or 3 when I file next year depending on what goes on with IRS rulings this year.

TNC use (uber or other app on)

Driving to uber (or whatever you name it)

Personal

The TNC use will be deductible. Little argument about that. The personal won't be. WE are still not entirely sure about the other. But at the end of the year add up all the deductible miles and you will get a deduction of that times 57.5 cents off your taxable income.

You can do the actual costs but that is a pain and is very unlikely to be more. And you still need mileage because if you use your car for ANYTHING personal you can only deduct the % business use. So if you drove 1000 miles for Uber and 9000 personal you can deduct 10% of actual costs.

any permits and licenses just for TNC are deductible. We have these in houston and you have to do various things like a drug test to get them. All deductible. Car chargers, water and mints for pax (but I wouldn't bother), a cover you buy for your seat in case if service dogs, all of a cell phone used JUST for this or % of one also used for personal are deductible so keep receipts. I have a mileage log and a folder in my car. I do keep all my gas records although it doesn't matter for the IRS if you use mileage but I do want to know what I'm spending in gas.

have you read about the insurance gap? Do that before you make any decisions.


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## Older Chauffeur (Oct 16, 2014)

bmwuber said:


> limit is 12,000 per year. I'm under milage now. Plus I'm not really worried about mileage as the cost of 1 mile over lease is much less than the price per mile paid out by uber.


You might want to check the terms of your lease to be sure there are no restrictions regarding using the vehicle for hire or livery/commercial purposes. The lessor might require higher limits or commercial insurance. Also, your personal insurance most likely won't cover you for rideshare, and probably has a provision allowing them to cancel your policy for driving for hire and not disclosing that to them. Read "What is Not Covered" under each type of coverage on your policy.


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## bmwuber (Apr 6, 2015)

Older Chauffeur said:


> You might want to check the terms of your lease to be sure there are no restrictions regarding using the vehicle for hire or livery/commercial purposes. The lessor might require higher limits or commercial insurance. Also, your personal insurance most likely won't cover you for rideshare, and probably has a provision allowing them to cancel your policy for driving for hire and not disclosing that to them. Read "What is Not Covered" under each type of coverage on your policy.


What would i do if my insurance does not cover? do i add another instance policy? or does uber provide insurance for their employees?


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## Older Chauffeur (Oct 16, 2014)

Fatjoe said:


> How will taxes work if you make 70-75 at your other job?? I'm not trying to screw up our 5k typical return we get....if I made 1000-1200 a month doing uber do u think it would be a wash with the mileage??? Meaning I would still get our typical 5k tax return??


Joe, check out posts by member Tristan Zier regarding being an independent operator. He runs Zen99 and there website allows you to track your income and expenses as you go along, giving you a taxable income amount year-to-date. You can link your bank account/credit card and the program will track income and expenses for you. You enter the mileage driven for Uber and it calculates the deductible amount.


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## Older Chauffeur (Oct 16, 2014)

bmwuber said:


> What would i do if my insurance does not cover? do i add another instance policy? or does uber provide insurance for their employees?


First, you would not be an employee of Uber, but rather an independent contractor. Your personal insurance will not cover Uber driving. You might be able to get coverage from Metromile, which offers insurance for personal and Uber use.
You would probably find answers and advice on most of your questions and concerns if you used the search feature and entered key words, thus taking you to the appropriate threads. There are lots of helpful members here, but you could help yourself a lot as well by reading up on the basics first. Good luck to you, whatever you decide, but IMHO, one of those $10 hour jobs would be a better deal.


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## Tristan Zier (Nov 25, 2014)

Older Chauffeur said:


> You can search these forums for tax info, but basically you will do best by using the IRS approved per mile deduction of $.575 for all business related driving, including dead miles. That covers all the usual car expenses including maintenance, depreciation, fuel, etc. This makes it easy, and you don't need receipts, but rather an accurate mileage log showing start/finish odometer readings. The only time you can write off payments is if you lease the car, in which case I believe you then track all other expenses related to the car and keep receipts for everything you want to write off. The water provided for customers is probably OK, but keep the receipts for that, along with any tolls or parking fees, which aren't included in the per mile rate. If done right, you won't show much taxable income, but you will be trading your equity in your car for what amounts to minimum wage.


This is correct - generally better to use Standard Mileage Rate. However, that rate does include lease payments (if you lease the car) or depreciation (if you own the car), so you can't write off the mileage PLUS leases (mileage already includes it).

Water/snacks purchased for passengers are definitely a business expense. Lunches you buy for yourself out on the road are unfortunately not a business expense.


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## Tristan Zier (Nov 25, 2014)

Fatjoe said:


> How will taxes work if you make 70-75 at your other job?? I'm not trying to screw up our 5k typical return we get....if I made 1000-1200 a month doing uber do u think it would be a wash with the mileage??? Meaning I would still get our typical 5k tax return??


Getting a tax "refund" isn't actually a good thing - all it means is that your employer withheld too much money from your pay throughout the year. That is, you should have been paid more each paycheck, but instead had to wait until a year later to get that money. But people do love getting a refund check 

As an independent contractor with Uber, you don't have taxes withheld from your pay. That means you need to pay taxes throughout the year (if you expect to owe more than $1,000 in taxes for the year). If you overpay, you'll also get a refund from that. If you don't pay taxes on your Uber income throughout the year, you may be subject to a penalty on the underpaid amount, or it may be offset against any other refund you would get from your W-2/employee job.


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## Older Chauffeur (Oct 16, 2014)

Tristan Zier said:


> This is correct - generally better to use Standard Mileage Rate. However, that rate does include lease payments (if you lease the car) or depreciation (if you own the car), so you can't write off the mileage PLUS leases (mileage already includes it).


Trystan, thanks for explaining this and the correction. It makes sense now that I think about it, as you are paying for the depreciation of the car during the time you have it on lease, as opposed to taking the hit when you sell or trade an owned car.


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## OrlUberOffDriver (Oct 27, 2014)

bmwuber here is some good info on 
Standard Mileage or Actual Expenses. 
http://www.smbiz.com/sbfaq024.html


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## Desert Driver (Nov 9, 2014)

DrJeecheroo said:


> Gas yes. Water I don't think so. Ask desert driver on other possibilities.





Tristan Zier said:


> This is correct - generally better to use Standard Mileage Rate. However, that rate does include lease payments (if you lease the car) or depreciation (if you own the car), so you can't write off the mileage PLUS leases (mileage already includes it).
> 
> Water/snacks purchased for passengers are definitely a business expense. Lunches you buy for yourself out on the road are unfortunately not a business expense.
> 
> You can check out other expenses to write off in our 1099 tax guide at ********************/1099-tax-guides (there's a section for ridesharing expenses).


That link is not a bad primer for understanding taxes. Most of the info is pretty accurate.


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## JaxBeachDriver (Nov 27, 2014)

How about tax left offs?


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## Mark in SD (Apr 15, 2015)

Being self employed you will have to pay tax quarterly. Create a bank account and put away 16% of your earnings. Every three months you will have to file. You can get away without doing this for the first year, maybe. I had a computer consulting business. I got off away with the first year, but was warned by my accountant I needed to file quarterly. I no longer have that business, or that accountant, but I suspect I still need to file quarterly.


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## Mark in SD (Apr 15, 2015)

Scary time.... Read this stuff. 
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center


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## Desert Driver (Nov 9, 2014)

Mark in SD said:


> Being self employed you will have to pay tax quarterly. Create a bank account and put away 16% of your earnings. Every three months you will have to file. You can get away without doing this for the first year, maybe. I had a computer consulting business. I got off away with the first year, but was warned by my accountant I needed to file quarterly. I no longer have that business, or that accountant, but I suspect I still need to file quarterly.


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## Desert Driver (Nov 9, 2014)

Mark in SD said:


> Being self employed you will have to pay tax quarterly. Create a bank account and put away 16% of your earnings. Every three months you will have to file. You can get away without doing this for the first year, maybe. I had a computer consulting business. I got off away with the first year, but was warned by my accountant I needed to file quarterly. I no longer have that business, or that accountant, but I suspect I still need to file quarterly.


The actual profit ftom driving Uber is so miniscule that quarterly filing isn't really necessary.


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## Mark in SD (Apr 15, 2015)

They are still going to hit us for Social Security and Medicare tax at end of year right? That is if we make a profit after deductions.


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## Desert Driver (Nov 9, 2014)

Mark in SD said:


> They are still going to hit us for Social Security and Medicare tax at end of year right? That is if we make a profit after deductions.


Indeed.


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