# Just started doing Uber and made 500+. Need guidance.



## Jerbear2017 (Dec 17, 2018)

This is the first time I ever had ha 1099 anything and just did it as a side hustle and didn’t really think about tracking expenses and such. I understand that I can deduct miles and apparently Uber is going to send me a form that INCLUDES what they make meaning I will need to do calculations and find out exactly how much i actually need to pay. At this point might it just be easier to hire a professional? Some help is really appreciated.


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## Seamus (Jun 21, 2018)

In the search bar type in "taxes" and you can read the multiple posts about taxes and a wealth of information. Welcome to UP.


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## Pax Collector (Feb 18, 2018)

Welcome to the forum.

As far as deductions go, you have two options. The standard mileage deduction (Highly recommended for simplicity) and the itemized deduction (More complicated and paperwork intensive).

Here's how the stand deduction would work in a nutshell.

Uber will include the total miles you drove with the app on in the form they're going to send you. While it's helpful, it is significantly lower than your actual miles driven. Do you remember your odometer reading from when you first started? Or a close estimate? Take that number and subtract it from your current odometer reading. After that, try to figure out how many miles of personal driving you can exclude from that and you get your total deductible miles. Multiply that number by .54 which is an approximation of the IRS standard mileage deduction of 54.5 cents per mile and you get the total dollar amount you can write off as a business expense.

On top of the IRS standard mileage deduction, you can also write off interest on your car loan (If you have any) and your insurance payments. Just make sure you calculate the percentage you spend on Uber driving and personal driving.

Example:

Let's say you drove a total of 10,000 miles in that tax year. 5,000 miles were driven for Uber and the rest 5,000 for personal use. That gives you a deductible rate of 50% on your car payment interest and insurance. It's simple math after that. From a car payment of $300/month, you'll be able to deduct $150 and from let's say $50/month in insurance payments, $25 can be written off.

Or.....

You can go the harder and more complicated route and track every single expense, including gas, car washes, registration, car maintenance oil changes and etc. But that would require saving receipts from each expense and adding up the total expense.

In my opinion, using the IRS's standard 54.5 cents a mile deduction is a much simpler and more generous tax write off option.

You asked if it would be easier to hire a professional. My answer is a resounding yes. Especially on your first year of doing this. After that, you can take care of it yourself.

***The above is how I calculate my tax deductions. It's solely intended to be used as a suggestion and not a tax advice. I'm not a tax professional and you should consult one to avoid potential tax liabilities***


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## Jerbear2017 (Dec 17, 2018)

Thanks for the reply. When do I actually pay the amount I owe in taxes to the irs? Does that happen in April when I file a return? Let’s say the I make around 600 dollars...would the amount I owe in taxes be sprint 60 dollars only?


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## FrankLStanton (Oct 18, 2016)

If you do your own taxes, I would suggest that you use a package like TurboTax, TaxCut, HR Block, etc. These packages will normally provide you with a questionnaire to determine which forms you need to submit. I would also suggest you read this forum for background and guidance in completing your tax return. These packages should not cost you more than $100 and should be less with available discounts from Uber and LYFT.

If you are not comfortable preparing your own taxes, find a tax professional. While there is a fee involved, that fee will be deductible on next year's return, just as the price for tax software is deductible if you do your own. They will guide you through the process with an interview or questionnaire to help gather all the info they need to complete your return. I am going to step out on a limb and say a service will probably run you approximately $300, give or take.

Any tax owed, will be due when you file your return. Going forward and depending on your personal circumstances like the amount of self employment income you have, you may have to pay quarterly. I get the sense that this filing will be your first so I wouldn't worry about quarterly at this point.


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## Jerbear2017 (Dec 17, 2018)

FrankLStanton said:


> If you do your own taxes, I would suggest that you use a package like TurboTax, TaxCut, HR Block, etc. These packages will normally provide you with a questionnaire to determine which forms you need to submit. I would also suggest you read this forum for background and guidance in completing your tax return. These packages should not cost you more than $100 and should be less with available discounts from Uber and LYFT.
> 
> If you are not comfortable preparing your own taxes, find a tax professional. While there is a fee involved, that fee will be deductible on next year's return, just as the price for tax software is deductible if you do your own. They will guide you through the process with an interview or questionnaire to help gather all the info they need to complete your return. I am going to step out on a limb and say a service will probably run you approximately $300, give or take.
> 
> Any tax owed, will be due when you file your return. Going forward and depending on your personal circumstances like the amount of self employment income you have, you may have to pay quarterly. I get the sense that this filing will be your first so I wouldn't worry about quarterly at this point.


Thank you for that. This is my first time and figure that. Since I also have a W-2 job will they take it out of the refund. What is the rules for if you make less than 600 dollars?


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## KK2929 (Feb 9, 2017)

Jerbear2017 said:


> Thank you for that. This is my first time and figure that. Since I also have a W-2 job will they take it out of the refund. What is the rules for if you make less than 600 dollars?


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Independent contractors are required to file and pay taxes quarterly ( although most do not). 
There are four forms to file. You need to keep proof of everything you claim - mileage, gas, car expenses, etc


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## Older Chauffeur (Oct 16, 2014)

I've used TurboTax Deluxe. Their marketing folks try to make you think that you need one of their more expensive versions, but as long as they include Schedules C and SE in the Deluxe version, that's all you need. I buy it at Costco for around $50. It will walk you through the Independent Contractor/1099/Self Employment issues.
If you have made only $500-600, my guess is that you probably won't owe much in extra taxes, after deducting your mileage and cellphone charges related to business use. Your net profit, if any, goes on your Form 1040 along with yourW2 income. Your withholding from your regular job will should cover any extra tax, assuming you usually get a refund.
Quarterly payments aren't required by independent contractors just because of their status. They're treated the same as anyone else. In general, if you owe (meaning you have to write a check) the IRS more than $1000 at filing time, they will want quarterly payments. There are exceptions, having to do with whether you have paid in through withholding an amount equal to last year's tax, or 90% of this year's. I doubt you need to worry.
I agree with those who suggested reading through the tax threads. Pay special attention to posts/threads by
UberTaxPro, our tax guru. Good luck.

Disclosure: I am not a tax professional.


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## UberTaxPro (Oct 3, 2014)

FrankLStanton said:


> While there is a fee involved, that fee will be deductible on next year's return, just as the price for tax software is deductible if you do your own.


The Tax Cuts and Jobs Act has taken this deduction away till at least 2025 beginning with tax year 2018.



Jerbear2017 said:


> This is the first time I ever had ha 1099 anything and just did it as a side hustle and didn't really think about tracking expenses and such. I understand that I can deduct miles and apparently Uber is going to send me a form that INCLUDES what they make meaning I will need to do calculations and find out exactly how much i actually need to pay. At this point might it just be easier to hire a professional? Some help is really appreciated.


What do you mean by "didn't really think about tracking expenses and such"? Are you saying that you didn't keep a mileage log? Did you do your taxes yourself or hire someone last year?


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## KK2929 (Feb 9, 2017)

Quarterly payments aren't required by independent contractors just because of their status. They're treated the same as anyone else.

UberTaxPro --Do you agree with the above statement ?


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## Older Chauffeur (Oct 16, 2014)

From the IRS:

Question
How do I know if I have to file quarterly individual estimated tax payments?
Answer
You must make estimated tax payments for the current tax year if both of the following apply:


You expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits.
You expect your withholding and refundable credits to be less than the smaller of:
90% of the tax to be shown on your current year's tax return, or
100% of the tax shown on your prior year's tax return. (Your prior year tax return must cover all 12 months.)

There are special rules for:


Farmers and fishermen
Certain household employers
Certain higher income taxpayers
Nonresident aliens
Additional Information
Publication 505, Tax Withholding and Estimated Tax
Form 1040-ES (NR), U.S. Estimated Tax for Nonresident Alien Individuals
Form 1040-ES, Estimated Tax for Individuals
Category
Estimated Tax
Sub-Category
Individuals


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## UberTaxPro (Oct 3, 2014)

KK2929 said:


> Quarterly payments aren't required by independent contractors just because of their status. They're treated the same as anyone else.
> 
> UberTaxPro --Do you agree with the above statement ?


I agree with the first statement....estimated payments are not based on filing status. 
The 2nd statement is true regarding estimated payments but doesn't hold true in other areas, for example, IC's are eligible for the new section 199a deduction and W2 employees are not. With proactive tax planning IC's have many tax saving opportunities that W2 employees can only dream about!


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## SamuelB (Aug 29, 2018)

UberTaxPro said:


> IC's are eligible for the new section 199a deduction


I'm trying to understand this 199A deduction. Basically, for someone that only has only 1099 income and doesn't have any capital gains or other tax issues they get to deduct an additional 20% of their taxable income. Do I have that right?


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## UberTaxPro (Oct 3, 2014)

SamuelB said:


> I'm trying to understand this 199A deduction. Basically, for someone that only has only 1099 income and doesn't have any capital gains or other tax issues they get to deduct an additional 20% of their taxable income. Do I have that right?


Basically yes. The income has to be "qualified business income" and the deduction only offsets income tax, not self employment taxes(medicare and social security). Corporate rates were lowered so the purpose of this 199a is to level the playing field for all businesses.


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