# tax deductions milage



## dillonmcgee (Apr 7, 2016)

Hello i recently started driving and wanted to be sure i get the 0.56 or so per mile deductions as expenses for driving , what sort of log do i need to keep and what is allowed to be logged? 
can i log my milage when i turn on the app and log it again when it ends ( ideal simple method ).
can i include down time ( i drive 10 miles with the app on after pickup #1 and start pickup #2 after driving those 10 miles while not going to get someone or transporting someone ) ?
any good apps to use?
thanks


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## Older Chauffeur (Oct 16, 2014)

Keep a log of starting and ending odometer readings for each shift. I use a DayPlanner, but there are apps that supposedly satisfy the IRS. I would make sure to use one that tracks odometer readings, not just miles. Count all miles app is on and you are awaiting pings. Those are all business miles; $0.54 per mile for 2016.


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## dillonmcgee (Apr 7, 2016)

OK i have an app called trip log it can use GPS or manual but it has a odometer record i can use , so i assume as long as i either enter the milage and odometer milage i should be ok- ex-- 10/7/16 -10pm 30810---- 3 am 30901 -91 miles - ?


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## Friendly Jack (Nov 17, 2015)

Yes, you should be okay with that app. IRS requires a daily log including starting and ending odometer readings plus logging of any miles that were not work related. As long as the Lyft/Uber app was on and you were willing to accept a request if pinged, then the mileage is deductible. There is a nice Lyft-Uber activity tracking spreadsheet on eBay that you can check out. I use it to track everything for the tax year.


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## dillonmcgee (Apr 7, 2016)

ok good to know- is there ever a "grey area to worry about with down time?
ex i picked up someone form an airport drove them 50 miles , then decided to head back to my home area and made it home and stopped for dinner and went offline , would the IRS ever have a problem with that? including the trip back and simply not having any luck that time ?


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## Friendly Jack (Nov 17, 2015)

The advice I was given from my tax guy is as I previously stated : If the app is online and you are willing to accept a request, then the mileage is deductible; if the app is not online then any mileage incurred is considered to be personal (non-business) or commuting mileage and is not deductible.


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## RamzFanz (Jan 31, 2015)

If you do your admin at home, you have a qualified home office. ALL miles doing business in the same field of business away from your office are deductible. App on or off isn't relevant.

Source: The IRS.

______

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.
Page 587.
______

*Office in the home.* If you have an office in your home that qualifies as a principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business.

Page 463.


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## Friendly Jack (Nov 17, 2015)

I am not saying that you are wrong in your interpretation, RamzFanz, it could be my guy who interprets it incorrectly or very carefully. I was advised to be very careful when considering the home office "principal place of business" test, because you must also 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.
In the case of rideshare activitiy, I was told that the IRS will consider the entire metropolitan area, city and suburbs, of the city in which you live as the "other" place we conduct business. It's probably not too big a deal either way unless the time your app is active as shown in statements cannot possibly support the mileage deduction claimed.


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## RamzFanz (Jan 31, 2015)

Friendly Jack said:


> In the case of rideshare activitiy, I was told that the IRS will consider the entire metropolitan area, city and suburbs, of the city in which you live as the "other" place we conduct business.


I'm no expert but what he is describing sounds like your _tax home_ which would exclude you from claiming other expenses like food and other costs of business travel. It's a ***** to interpret some of these but I don't think that applies.

If you went to an office, that wouldn't be deductible. If you go to another place of business from that office, it would. Since you are leaving your office to do business, it seems to be deductible according to anything I can find. Just like a work from home plumber or real estate agent. They aren't commuting, they are going between their office and a temporary work site within their tax home and all of the miles are deductible.

If I'm wrong I've filed 22 years of taxes in error and they've never asked.


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## dillonmcgee (Apr 7, 2016)

Alright it looks like I should be ok to use all clocked in miles and if not at Least all driving passenger miles . My next question is how exactly do deductions of this nature work at the end of the year? Suppose I make 10,000 miles that's around 5600 deduction at the $.56 rate Does that mean I get 5600 back as a refund? Or some somewhat different formula? If it matters suppose I make 16,000 at job one and 10,000 at job Uber


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## UberTaxPro (Oct 3, 2014)

its $5600 you don't pay tax on . you'll get a 1099 that the irs will hold u accountable for. this will account for $5600 of the gross 1099 amount.


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## Friendly Jack (Nov 17, 2015)

dillonmcgee said:


> My next question is how exactly do deductions of this nature work at the end of the year? Suppose I make 10,000 miles that's around 5600 deduction at the $.56 rate Does that mean I get 5600 back as a refund? Or some somewhat different formula? If it matters suppose I make 16,000 at job one and 10,000 at job Uber


Dillonmcgee, I am not a certified tax accountant, but per my personal experience I believe that what I am going to explain is accurate. Please do seek out a professional tax advisor if any of this does not make sense to you.

First, put the $16,000 from your first job to the side in this discussion, we'll get back to it later. In your example, dillonmcgee, the $5,600 mileage allowance is an offset (expense) to the $10,000 self-employment gross income you earned doing Uber. So, assuming no other expenses, you would have a $4,400 net profit from your Uber business activity and all of this would be computed and stated on Schedule C of your tax return. Then -- and not to be confused with income tax -- this $4,400 net profit from Uber activity is subject to self employment tax of 15.3% before any income tax liability is considered. You *MUST *pay this 15.3% self employment tax even if you pay no income tax. The 15.3% is comprised of 6.2% FICA tax (social security tax) plus 1.45% Medicare tax, which totals 7.65%. Since you are self-employed and your own employer you also pay the matching employer contribution of 7.65% making the 15.3% total self-employment tax. Therefore, you would owe $673.20 of self-employment tax ($4,400 x 15.3%) on your $4,400 net profit from Uber activity. This is all computed and stated on Schedule SE of your tax return.

Now, let's put the $16,000 back on the table. It plus the $4,400 net profit from Uber activity, $20,400 total, is what would be considered your total income subject to possible income tax before deductions. The good news is that for income tax purposes you can deduct half of the 15.3% self-employment tax (that is, 7.65%, the employer portion; you, in this case) from your income thereby reducing the amount on which standard income tax may be owed. Half of $673.20 is $336.60 and you can deduct this from income. Assuming no other adjustments to your income (let's keep this simple), your adjusted gross income would be $20,063,40 ($16,000 + $4,400 - $336.60) and this is what is subject to income tax before deductions.

Not knowing anything about your family status (married, single, dependents) or your filing status (single, married, head of household), it is reasonably safe to say that a minimum standard deduction and exemption will cut that taxable income amount in half. This would leave you in the lowest of marginal tax brackets and your tax liability would probably be covered by withholding from your first job (assumed to be W-2 employment with taxes withheld). Again, I am just trying to give you an overview and a little help, so do seek out a professional tax advisor. Good luck!


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## dillonmcgee (Apr 7, 2016)

alright that makes alot more sense i did not know uber was untaxed at first- i.e not each check but at the end of the year - i knew the numbers were not adding up, it was too much money from the government lol- ill be sure to have someone look at my papers before i turn them in
thank you


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## nycuser (Apr 14, 2016)

dillonmcgee said:


> Hello i recently started driving and wanted to be sure i get the 0.56 or so per mile deductions as expenses for driving , what sort of log do i need to keep and what is allowed to be logged?
> can i log my milage when i turn on the app and log it again when it ends ( ideal simple method ).
> can i include down time ( i drive 10 miles with the app on after pickup #1 and start pickup #2 after driving those 10 miles while not going to get someone or transporting someone ) ?
> any good apps to use?
> thanks


I use an app called sherpashare. they have a chat app as well. called sherpashare pulse on apple store and its all lyft and uber drivers. its really useful to get these questions answered by other people driving in your city. you should definitely keep a mileage log. i cant be bothered to write so i use the app. it lets you sort miles into personal and wrok. but irrespective of that you should note odometer readings beggining and end of the year. even if you use an app. they still wanna know what percentage you drove for rideshare. and you might think im only saving 400 usd. why will the irs care? they probably wont. but in 5 years if you have a baller biz.. and they audit you for something stupid. this will come up and they will want records. so start keeping records!!!


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