# is this stuffs tax deductible?



## KrisThuy (Aug 6, 2014)

*geniune car leather seat cover
*17inch good looking rims
*replace with sporty body kit

is this three can be used as deductible?

thanks guys


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## LAuberX (Jun 3, 2014)

you choose how to expense your car.

Mileage at .56 per mile (I will drive over 34,000 "uber" miles this year)
OR
"expenses" gas, oil, tires, seat covers, wheels..... you can't use both.

My gas will total about $4,500.00, oil changes $200. insurance $500. or $5,200.00 in "expenses"

so I think I am taking "mileage" $19,040.00 (That is more than my car cost me to buy)

with the new dashboard I have no idea what my total is without adding up all the seperate weeks, I will wait for the 1099 to show up.


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## KrisThuy (Aug 6, 2014)

LAuberX said:


> you choose how to expense your car.
> 
> Mileage at .56 per mile (I will drive over 34,000 "uber" miles this year)
> OR
> ...


yo man thanks for this great info


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## scrurbscrud (Sep 11, 2014)

LAuberX said:


> you choose how to expense your car.
> 
> Mileage at .56 per mile (I will drive over 34,000 "uber" miles this year)
> OR
> ...


I'm thinking you won't have any taxes to pay for Ubering.


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## LAuberX (Jun 3, 2014)

scrurbscrud said:


> I'm thinking you won't have any taxes to pay for Ubering.


Ding ding ding! We have a winner! The Best thing about Uber!

No taxable income.

Its still just a minimum wage gig with no boss and a great view


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## scrurbscrud (Sep 11, 2014)

LAuberX said:


> Ding ding ding! We have a winner!
> 
> Its still just a minimum wage gig with no boss and a great view


Yeah, but you like to drive, right? heh heh

Seriously though, I'm thinking you probably only got paid for about 1/2 o dem miles but some of them were before the paycut. Nevertheless when you factor that I personally have a hell of a time getting to a buck a mile overall and that's with some XL and surge. LA just X fare is probably going to be much less than that. Maybe not. But by the time you put in whatever other expenses your creative accountant can muster I wouldn't expect the tax bite to even bite. Just guessin tho. I hope not. It would be a shame to see anyone getting a buck ten a mile gross for X fares to have to pay taxes. Doesn't compute unless you were driving like 2-5X surge all the time. That would be a feat!


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## LAuberX (Jun 3, 2014)

I hate to do the math, but it is closer to 2 miles driven for each dollar I net.

Before all the cuts and new drivers more like 1:1

Used Prius only car that makes $ense for this gig.


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## scrurbscrud (Sep 11, 2014)

LAuberX said:


> I hate to do the math, but it is closer to 2 miles driven for each dollar I net.
> 
> Before all the cuts and new drivers more like 1:1
> 
> Used Prius only car that makes $ense for this gig.


Ouch. Fortunately (by my humble estimations) Prius drivers can probably motor around for about a quarter a mile or so, even allowing for some repairs and replacement costs. Leaving you with somewhere in the high 20 cent range per mile actual income, but untaxed. So, the 34000 miles amounts to somewhere in the 9-11K range, untaxed. And you had to work yer ass off to git it. But hey, it's after tax (no tax), so it generally amounts to about the equivalent of a grand a month part time yob with shitty hours.


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## ashy (Jul 16, 2014)

KrisThuy said:


> *geniune car leather seat cover
> *17inch good looking rims
> *replace with sporty body kit
> 
> ...


You need to speak to accountant, you can't claim for mileage if you using your car for commercial use ie Taxi service

You claim for gas car washes repairs and so on no Mileage


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## scrurbscrud (Sep 11, 2014)

ashy said:


> You need to speak to accountant, you can't claim for mileage if you using your car for commercial use ie Taxi service
> 
> You claim for gas car washes repairs and so on no Mileage


Where the HELL did you come up with that?!

Yes, it's a MILEAGE or ACTUAL COST deduction.

http://www.irs.gov/publications/p463/ch04.html
http://www.irs.gov/publications/p463/ch04.html
Near the top of the page re: Taxi's


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## Uberaccountant (Jan 1, 2015)

KrisThuy said:


> *geniune car leather seat cover
> *17inch good looking rims
> *replace with sporty body kit
> 
> ...


Unfortunately these three items would not be able to be deducted as a normal business expense under the IRS Code Section 162 & 212. Section 162(a) permits a deduction for all ORDINARY *and *NECESSARY expenses paid for or incurred for a business such as driving for UBER.

An expense is deemed ORDINARY if it is normal, usual, or customary in the type of business. While wheel rims can be deductible on your 1040 Schedule C as an Auto Expense, it sounds like your rims which are "good looking", which probably cost significantly more then traditional rims, which would not qualify.

Yes you need rims for your car, that is ordinary expense, but the IRS would not allow you to deducted for rims that are customized.

The leather car seat cover and sporty body kit fall under both categories as not NECESSARY or ORDINARY. You do not need these items to conduct and operate your business as an Uber driver.

Hope this helps.


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## grams777 (Jun 13, 2014)

Uberaccountant said:


> Unfortunately these three items would not be able to be deducted as a normal business expense under the IRS Code Section 162 & 212. Section 162(a) permits a deduction for all ORDINARY *and *NECESSARY expenses paid for or incurred for a business such as driving for UBER.
> 
> An expense is deemed ORDINARY if it is normal, usual, or customary in the type of business. While wheel rims can be deductible on your 1040 Schedule C as an Auto Expense, it sounds like your rims which are "good looking", which probably cost significantly more then traditional rims, which would not qualify.
> 
> ...


Suppose those items help your ratings (i.e. keep you further away from being deactivated aka fired) and generate more tips. Some people also do various seat covers to protect the seats from dirt and puke and spills and being torn up. We're not talking about a car used by a sales person to drive from work to a client's office. The car is the business like a hotel room or restaurant booth might be. It's seems ordinary and necessary can be subject to interpretation. Now, if you want to talk about ordinary expense versus capital expenditure, or expenses already included in the mileage rate, that may be different.


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## Uberaccountant (Jan 1, 2015)

grams777 said:


> Suppose those items help your ratings (i.e. keep you further away from being deactivated aka fired) and generate more tips. We're not talking about a car used by a sales person to drive from work to a client's office. The car is the business like a hotel room or restaurant booth might be. It's seems ordinary and necessary can be subject to interpretation. Now, if you want to talk about ordinary expense versus capital expenditure, or expenses already included in the mileage rate, that may be different.


The US Tax code is always open to interpretation since they are laws. But let's use your analogy of a business like a hotel room. When a hotel has to fix a light bulb or a inoperable TV those are classified as an Expense. If I were to replace the bed, carpeting, or upgrade the furnishings to increase guest satisfaction, it would be recorded as a Capital Expenditure since it is to have a significant future benefit.

An expense, on the other hand, is one that is recorded simply to maintain the asset (Vehicle) in current operating condition. Most drivers who work for Uber, Lyft, or Sidecar cross-utilize their vehicle for both business & personal purposes. With that said

one potential valid argument that I would submit to the IRS would be only if your vehicle is used exclusively for the business, with 0 miles being driven for any personal purposes. But that is still a 50/50 shot and it's better not to risk an audit.


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## CowboyMC (Aug 26, 2014)

Include deductions for phone holder and GPS.


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## Bart McCoy (Nov 4, 2014)

CowboyMC said:


> Include deductions for phone holder and GPS.


what about the phone bill if you use your personal phone to Uber?


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## CowboyMC (Aug 26, 2014)

Here is what IRS says:
*IRS Issues Guidance on Tax Treatment of Cell Phones; Provides Small Business Recordkeeping Relief*
IR-2011-93, Sept. 14, 2011
WASHINGTON - The Internal Revenue Service today issued guidance designed to clarify the tax treatment of employer-provided cell phones.
The guidance relates to a provision in the Small Business Jobs Act of 2010, enacted last fall, that removed cell phones from the definition of listed property, a category under tax law that normally requires additional recordkeeping by taxpayers.
The Notice issued today provides guidance on the treatment of employer- provided cell phones as an excludible fringe benefit. The Notice provides that when an employer provides an employee with a cell phone primarily for noncompensatory business reasons, the business and personal use of the cell phone is generally nontaxable to the employee. The IRS will not require recordkeeping of business use in order to receive this tax-free treatment.
Simultaneously with the Notice, the IRS announced in a memo to its examiners a similar administrative approach that applies with respect to arrangements common to small businesses that provide cash allowances and reimbursements for work-related use of personally-owned cell phones. Under this approach, employers that require employees, primarily for noncompensatory business reasons, to use their personal cell phones for business purposes may treat reimbursements of the employees' expenses for reasonable cell phone coverage as nontaxable. This treatment does not apply to reimbursements of unusual or excessive expenses or to reimbursements made as a substitute for a portion of the employee's regular wages.
Under the guidance issued today, where employers provide cell phones to their employees or where employers reimburse employees for business use of their personal cell phones, tax-free treatment is available without burdensome recordkeeping requirements. The guidance does not apply to the provision of cell phones or reimbursement for cell-phone use that is not primarily business related, as such arrangements are generally taxable.
Details are in the memo and in Notice 2011-72, posted today on IRS.gov.


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## CJ ASLAN (Sep 13, 2014)

So this may be a dumb question, but I made roughly $2200 last year driving for Uber. I am still waiting for my 1099. How would I go about claiming this? Will I have to pay back taxes for this? Would I do the mileage @ $0.56 or expenses? Sorry, first time having to 1099 and I usually file myself.

Thanks in advance!


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## CowboyMC (Aug 26, 2014)

The income and expenses go on a Schedule C. Most people use the mileage $0.56 per mile as an expense. You should keep a daily log of the mileage. You can deduct not only the mileage while driving the client, but also the mileage returning from a drop-off and mileage going to pick-up client.


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## Tristan Zier (Nov 25, 2014)

KrisThuy said:


> *geniune car leather seat cover
> *17inch good looking rims
> *replace with sporty body kit
> 
> ...


There's a lot of incorrect information in this thread. If you are not a CPA, please stop commenting on these threads as it's only continuing to spread bad information!

Those 3 items would be considered capital improvements to the car which would increase it's "basis" (basically, the cost of the car, which is used when you're calculating depreciation). This would only come into play if you're tracking depreciation yourself, which requires you to use the Actual Costs Method. Most Uber drivers should use the Standard Mileage Rate as it's far more favorable; in this case, you wouldn't be able to write those 3 items off as an expense.

More information on how to write off Car Expenses (Standard Mileage Rate vs Actual Costs Method) and other expenses you can write off here: *******************/guides/ridesharing


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## cybertec69 (Jul 23, 2014)

When Uber sends me my 1099 "money paid out to me by Uber" this includes the tolls, do I deduct the tolls "which is not earned money" from the 1099 total.


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## CowboyMC (Aug 26, 2014)

cybertec69 said:


> When Uber sends me my 1099 "money paid out to me by Uber" this includes the tolls, do I deduct the tolls "which is not earned money" from the 1099 total.


 Yes, you should deduct tolls that Uber pays you and tolls you paid out while returning from ride.


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## Tristan Zier (Nov 25, 2014)

cybertec69 said:


> When Uber sends me my 1099 "money paid out to me by Uber" this includes the tolls, do I deduct the tolls "which is not earned money" from the 1099 total.


That's correct. If it includes the tolls, you would include the toll as both income and expense. They offset each other so you won't pay any taxes on that. But it's important to record as both an income and expense so that the income you report on your Schedule C matches the income on the 1099.


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## flashgordonnc (Oct 24, 2014)

KrisThuy said:


> *geniune car leather seat cover
> *17inch good looking rims
> *replace with sporty body kit
> 
> ...


Are you serious, I can't tell.
Go to the IRS.gov website and search for mileage deduction. There are several printable publications that explain this.
p.s. Should you choose to use the mileage deduction, all you work related mileage is deductible, not just the ride miles.


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## ontheroad (Aug 31, 2014)

People, back in the late 80s, The irs decided to go after and audit taxi drivers in the Los Angeles area. There is a detailed article on the internet describing irs techniques. It was used to prepare and train its auditors on determining a driver's income and expenses. There is also a section on miles deduction. I believe the irs found anything over 50 percent of actual trip miles driven as dead miles, to be suspicious. Http://www.taxi-library.org/irsaudit.htm


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## flashgordonnc (Oct 24, 2014)

* ["IRS-hobby rule"]
Here is an almost laughable consideration *

If you are a full time hard working Uber driver, many drivers may be able to fully offset "any" earned income and thus not pay any taxes whatsoever, by properly using the mileage deduction, which of course includes the deadhead mileage.
So after 5 years of working full time driving, and not making a dime, if you did not make a profit in a least "two of the last five years" the IRS could attempt to call your Uber driving a *"Hobby"* and disallow all your deductions going back for at least the last 3-4 years, and bill you for taxes, plus interest and penalties!
I am looking into setting my Uber driving up as a charitable foundation, or a non-profit, to benefit MADD.


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