# My 2016 Taxes Summary. Probably helpful to new drivers.



## entrep1776 (Nov 3, 2016)

I ubered about a month or so starting end of Nov 2016.

$2226.60 What Uber paid me includes puke fee($80)/referral bonus ($40). I made $302.23 in tips. income $2528.83

1820.3 on trip miles according to Uber. 

My paper log book I recorded 4651 miles. Also going to include 1315 miles since bought car in Florida and drove it back to IL. So total miles 5966. Standard mileage deduction $3221.64. Paper Loss of $692.81.

Arguably about 10 cents a mile for my 2005 Prius. $596.60 actual cost. $1932.23 net. 199 hours 52 minutes on line.

my market is 75 cents a mile 15 cents a minute. 

Was 1st month. I make more per hour these days since I make fewer rookie mistakes. 

About $9.66 an hour with IMO cheapest car to operate. Since actually showing a loss. 

other job was taxed at 16.82% (federal, social security, Medicare, state) So think I'd had to make about $11.56/hour at McDonald's to have same amount of cash in my pocket.

Hope this helps.


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## Bulls23 (Sep 4, 2015)

Could you please explain how did you come up with $3.221 deduction? 
I made $9000 last year with uber. Drove 12000 miles. My accountant comes up with $8000 taxable income. What is she doing wrong?


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## entrep1776 (Nov 3, 2016)

Bulls23 said:


> Could you please explain how did you come up with $3.221 deduction?
> I made $9000 last year with uber. Drove 12000 miles. My accountant comes up with $8000 taxable income. What is she doing wrong?


not an accountant but..

12,000*.54 standard mile deduction =$6, 480 deduction

9,000 gross earnings (this is total deposited into your bank account? not before Uber fees) - $6,480 = $2,520 TAXABLE. not $8,000. but again I'm not cpa. & just using numbers you provided.

Also can deduct 50% of your cell phone bill.  This is standard mile deduction vs. actual cost.

hope it helps. interested to hear how it comes out?


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## Bulls23 (Sep 4, 2015)

entrep1776 said:


> not an accountant but..
> 
> 12,000*.54 standard mile deduction =$6, 480 deduction
> 
> ...


That looks more accurate. $9000 is my net income.


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## Older Chauffeur (Oct 16, 2014)

entrep1776 said:


> I ubered about a month or so starting end of Nov 2016.
> 
> $2226.60 What Uber paid me includes puke fee($80)/referral bonus ($40). I made $302.23 in tips. income $2528.83
> 
> ...


Im not a tax professional, but I'm guessing that if you were to be audited that trip home from Florida would probably be disallowed as not business related.


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## entrep1776 (Nov 3, 2016)

Older Chauffeur said:


> Im not a tax professional, but I'm guessing that if you were to be audited that trip home from Florida would probably be disallowed as not business related.


I'm not sure. Give auditor n I something to discuss . I did have an airline ticket that I didn't use and couldn't get money back on. Be interesting to see what a tax pro says. But it was additional mileage I drove to get started doing Uber. I don't feel unethical reporting those miles.


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## jerseyboys (Jan 14, 2016)

entrep1776 said:


> not an accountant but..
> 
> 12,000*.54 standard mile deduction =$6, 480 deduction
> 
> ...


not a CPA myself. But the $6,480 is not a straight dollar per dollar deduction. It reduces your taxable income but not straight $6,480.

Does that make sense?


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## entrep1776 (Nov 3, 2016)

jerseyboys said:


> not a CPA myself. But the $6,480 is not a straight dollar per dollar deduction. It reduces your taxable income but not straight $6,480.
> 
> Does that make sense?


*Tax* credits *vs*. *tax deductions*. ... *Tax*credits provide a dollar-for dollar reduction of your income *tax* liability. This means that a $1,000 *tax credit*saves you $1,000 in taxes. On the other hand, *tax deductions* lower your taxable income and they are equal to the percentage of your marginal *tax*bracket.

I think this is what you mean:

income-expenses=taxable income
$9,000-$6,480=$2,520

FICA tax of 15.3% (the 12.4% of Social Security tax plus the 2.9% of Medicare tax).

$2520×15.3% = $385. 56
$2520×15%(personal tax rate yours might be different) =$378
$763.56 would have to pay in taxes or 30.3% of net income in this case.

vs. 
$9,000 income taxed at 30% = $3,000
$3,000 taxes owed - $6,480 expenses = -$3, 480 refund which wouldn't make sense


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## jerseyboys (Jan 14, 2016)

entrep1776 said:


> *Tax* credits *vs*. *tax deductions*. ... *Tax*credits provide a dollar-for dollar reduction of your income *tax* liability. This means that a $1,000 *tax credit*saves you $1,000 in taxes. On the other hand, *tax deductions* lower your taxable income and they are equal to the percentage of your marginal *tax*bracket.
> 
> I think this is what you mean:
> 
> ...


The guy grossed $9,000 right?

He did 12,000 miles. So, you got $6,480 deduction for standard mileage right?

That $6,480 is not credit but deductions. As you stated.

BUT you subtracted dollar for dollar. It doesn't work that way.

He might come to about $5000 to $6000 taxable income. But not $2520. That's insane.

I been doing this with my other business and now Uber/Lyft. Also, if you use TurboTax. You will see the lower taxable income.

Another example. You mentioned cell phone for Uber . Let's say you paid I don't know $650 for the year. That deduction from $9000 is not a straight $650 deduction . Dollar for dollar. It lowers it by percentage.


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## Older Chauffeur (Oct 16, 2014)

The SMR is indeed a dollar for dollar deduction from revenue, leaving you with your net profit. There is no percentage involved. It doesn't save you a dollar in taxes for each dollar in the SRM, because your tax bracket determines what you actually pay on that profit. The same is true for cell phone bills and any other business expenses. Taking the deductions off your revenue also lowers the amount of FICA due as it is also figured on net profit, with a threshold of $400.

Disclosure: I'm not a tax professional. (But I've been doing this a while.)


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## entrep1776 (Nov 3, 2016)

I used 10 cents/mile as my actual cost/mile. After some research thinking my actual cost/mile is 12 to 13 cent/mile. Which is pretty big 20%-30% difference!

https://uberpeople.net/threads/what...ehicles-operational-cost.154266/#post-2304487


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## Older Chauffeur (Oct 16, 2014)

entrep1776 said:


> I used 10 cents/mile as my actual cost/mile. After some research thinking my actual cost/mile is 12 to 13 cent/mile. Which is pretty big 20%-30% difference!
> 
> https://uberpeople.net/threads/what...ehicles-operational-cost.154266/#post-2304487


Hard to know your actual cost per mile until you sell or junk the vehicle at the end of its useful life. But the SRM is meant to cover an average vehicle throughout the country, whether it's a handyman's pickup or a rideshare driver's Prius. I have owned three of the latter, and the first had an actual cpm of $0.21, while the second was $0.28. I sold both of them myself rather than trade them in.


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## entrep1776 (Nov 3, 2016)

Older Chauffeur said:


> Hard to know your actual cost per mile until you sell or junk the vehicle at the end of its useful life. But the SRM is meant to cover an average vehicle throughout the country, whether it's a handyman's pickup or a rideshare driver's Prius. I have owned three of the latter, and the first had an actual cpm of $0.21, while the second was $0.28. I sold both of them myself rather than trade them in.


How did you calculate the 21 cents and 28 cents on your Prius? I ran it through another calculator and came out with 13 cents. My starting car value is $3,575.

http://www.calculatorweb.com/calculators/carcostcalc.shtml


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## Older Chauffeur (Oct 16, 2014)

entrep1776 said:


> How did you calculate the 21 cents and 28 cents on your Prius? I ran it through another calculator and came out with 13 cents. My starting car value is $3,575.
> 
> http://www.calculatorweb.com/calculators/carcostcalc.shtml


I bought both cars new, and included everything related to owning them, including insurance, taxes, maintenance, repairs, tires, gas and depreciation. The first one was a base model 2004, and the market was hot for the Prius when I sold 2 1/2 years and 70k miles later for a good price. But when I sold the top of the line '06 in 2012 the market was softer and the car was six years old with 63k miles, so greater depreciation.

You bought yours at a good price, so your depreciation will be less, but in the first link you posted I believe you said you were using additional costs related to ridesharing.

Others have used the same method, figuring since they have to have a car and insurance anyway, their cpm only increases incrementally due to rideshare. But to me, I'm out of pocket X amount of dollars, divided by X amount of miles, regardless of how those miles were accrued. So that's the cpm number I use.

It all goes to show why it makes sense to buy a good used Prius rather than a new car to use for rideshare. The SMR allows you to keep more of the low mileage rates you get from Uber, because your cpm is on the lower end.

I don't do Uber/Lyft, (see my signature) but am able to deduct mileage driving to my clients' homes or offices. It's a much smaller percentage of the mileage on my car, but still allows me to lower my taxable income from contract driving.


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## SOLA-RAH (Dec 31, 2014)

I did one these analyses too. I broke it down to earnings, actual expenses, taxes paid, and hours worked. I hope it helps someone else to understand the complete money picture a little more clearly. Link: https://uberpeople.net/threads/2016-uberx-stats-true-net-15-11-hour.138366/


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## zyan (Sep 9, 2014)

guys;
average how many taxes do you owe to irs and paid it?


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## entrep1776 (Nov 3, 2016)

zyan said:


> guys;
> average how many taxes do you owe to irs and paid it?


https://www.thebalance.com/how-much-do-i-budget-for-taxes-as-a-freelancer-453676
Set Aside 25 to 30 percent of Every Paycheck That Comes in

I lost about $700 last year. So I will use it as a write off.

This year I plan to put aside 20% for taxes of what Uber deposits into my bank account. So my WAG for you is 20% of what Uber deposits into your bank account.

caveat - take tax advice from other Uber Drivers at your own risk! gl


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## old geezer (Feb 1, 2016)

deduct everything and don't worry about it. use 54 cents a mile and don't try to separate out the personal vs business use. In our tax bracket no one is going to audit you. This is the only way to make this Uber thing work to your advantage and make the money you ear tax free. It is a dollar for dollar write off. Deduct half your cell phone total expenses. Don;t forget tolls, just estimate if you don't have a total figure. Remember you are independent contractors. Figure in cost of your driver's license anything to beat the IRS. I take the mileage at the start of the year mileage at the end. Use that figure. I would tell the IRS I only use my car for Uber purposes. period. I never go to the movies and if I do I Uber on the way in. there.


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