# Tax deduction question



## yabadaba (Jul 26, 2014)

Hey there.

Can I deduct a used car that I bought cash ?

What kind of document will I have to provide?

With the current mileage the KBB on that car is between 8-9 k

What I have on the registration is 10% sales tax on $5000 = $500

So if I can deduct that cost will it be KBB or the registration that states there is 10% sales tax paid?

Another question.

I started recording my mileage and keep all the receipts from gas car wash and etc.

The thing is I drive for uber between 200-300 a day + 50-100 as delivery pizza. Can I basically say that all this expense is on Uber ?

One more.
Can insurance be deducted if it is just personal liability?


Thanks


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## mp775 (Jun 26, 2014)

Short answer is no to all of the above. You can use a standard deduction of 56 cents per mile to cover all of your vehicle expenses, or you can deduct actual expenses, which includes a portion of the vehicle's value each year (depreciation), registration, fuel, etc. If you use your car for multiple businesses and personal use, you must apportion out percentages of each. Your personal liability insurance is just that, personal, and would not cover you in a business-related incident; I'd say it is not deductible at all. I suggest reading the Transportation chapter of IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses.


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## yabadaba (Jul 26, 2014)

Thanks !

So if I drive for uber 200 miles a day which is 72000 miles if I drive 365 days. I can deduct 72000x 0.56 =40320.
But in that case I can not claim any other vehicle expenses, right ?

So in my case that seems better than actual expenses.


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## mp775 (Jun 26, 2014)

Yes, assuming all you do every day is drive for Uber. And that's 73,000 miles.


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## Bully (Jul 10, 2014)

So technically on your tax return you will be 'losing' money which means there will be no taxes to pay? Am I getting this right?


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## mp775 (Jun 26, 2014)

How so? At 200 miles a day every single day, you'd better be making more than $40k...


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## Bully (Jul 10, 2014)

mp775 said:


> How so? At 200 miles a day every single day, you'd better be making more than $40k...


Well that + all the other expenes.


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## yabadaba (Jul 26, 2014)

So yes if the 0.56 per mile is the way to go even without other vehicle expenses it sounds really good to me. 

Let's say we average fares of $200 a day 365 days. After uber cut it will end up being ~175 . 

So 175x365 =63,875

63k - 40k = 23k 

Tax on 23k = ? ( which I think its not bad)

Trying to figure out why 90% of the people are not happy here. Of course uber can't be your primary job but I think it pays really good if my math is right


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## Oc_DriverX (Apr 29, 2014)

Only you can judge your own happiness. I think it is tough to gauge other people's happiness from a message board. I, for one, comment on things where I would be "happier" if things were improved.

I know you are using round numbers in your projections, but I think you should note that on $200 in fares, using the 20% commission would have you net $160. Right now, you may be getting the $1 safe rider fee back, which would make it closer to $175, but since that is going away, you should plan on netting less that $160 from your $200 in fares. I also do not see the $10/week data fee factored in, unless you were including that in your $175. Of course, on a daily basis, that is just a little over $1.

Using your numbers you came up with 23k/year. I would ask you, do you really want to drive 365 days a year? And, how many hours a day do you average?

But, in the end, if you are using credible numbers, and you are happy, then that is all that counts.


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## yabadaba (Jul 26, 2014)

Oh I am not using actual numbers I would say close to actual. But trying to figure out the whole tax thing. I have been working as a cotractor on 1099 and filed taxes and I found tons of expenses and that helped me get decent anual salary. 

I work 8 hours doing uber and 5 hours delivery. I dont have a degree( hopefully for now) So I would prefer driving all day than sitting at a retail store and talking nonsense about a certain product.

I totaly understand that I might end up getting $10 an hour net but its better than McDonalds if you like driving and the flexible schedule is a big plus.


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## yabadaba (Jul 26, 2014)

Oc_DriverX said:


> Only you can judge your own happiness. I think it is tough to gauge other people's happiness from a message board. I, for one, comment on things where I would be "happier" if things were improved.
> 
> I know you are using round numbers in your projections, but I think you should note that on $200 in fares, using the 20% commission would have you net $160. Right now, you may be getting the $1 safe rider fee back, which would make it closer to $175, but since that is going away, you should plan on netting less that $160 from your $200 in fares. I also do not see the $10/week data fee factored in, unless you were including that in your $175. Of course, on a daily basis, that is just a little over $1.
> 
> ...


It has to be more than 23k. We are saying that 40k are expenses, are they really ? I see it that way.
$20 x 365 = 7300 gas money
$240 anual carwash
2x $500 for tires = $1000
10k oil changes , 7 of those = $30x 7=210
Lets say there are 10k expenses for something like somekind of problem with car ot whatsoever..
I am not going to put insurance as expense( we already have it) ok for the sake of ot lets put it here $2000

So this totals to 20,500
40,000- 25,000= 15,000 not taxable + 23,000 taxable. Now it looks a little bit better.


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## kalo (Jun 28, 2014)

yabadaba said:


> Oh I am not using actual numbers I would say close to actual. But trying to figure out the whole tax thing. I have been working as a cotractor on 1099 and filed taxes and I found tons of expenses and that helped me get decent anual salary.
> 
> I work 8 hours doing uber and 5 hours delivery. I dont have a degree( hopefully for now) So I would prefer driving all day than sitting at a retail store and talking nonsense about a certain product.
> 
> I totaly understand that I might end up getting $10 an hour net but its better than McDonalds if you like driving and the flexible schedule is a big plus.


Not sure about the big cities (you would likely earn more there). But my earnings/mile after subtracting the standard $.56 deduction is $.56/mil. My average miles in a day has been 62. There are a few other deductions like water, car washes, etc.. Use $.50/mile driven would be a good estimate of earning before income taxes. Working for yourself as you know one needs to pay quarterly income taxes and medicare tax. If you get audited, be ready with good docs. Be sure what you are "writing off" is allowed.


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## Oc_DriverX (Apr 29, 2014)

You use a figure of 10k for miscellaneous expenses. If this figure includes depreciation, then you are good. If not, then you might think about how much your car is depreciating. 73k miles a year in quite a bit, so you might be looking to get a newer car sooner as opposed to later.


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## yabadaba (Jul 26, 2014)

Yes if the 10k is for depreciation then all the numbers are right and it is not that bad. That is my opinion of course. If people think that they can do better and have other options and don't like the job, why the wait ?
But let's say a Prius costs 30k brand new I am pretty sure you can sell it after a year for 20k with 70k miles on it and I mean sell it as a private party not trade it ( which is the worst idea ever). We should not forget that within this year for a brand new car you won't pay a dime for maintenance if you know how to buy a car.
So I still think after paying taxes, depreciation and all other expenses working for Uber is not as bad as it sounds in this forum.

But you said it if you are happy what you do then numbers don't really matter 

BTW I hate having to pay the $10 a week for the "HUGE AMOUNT OF DATA" not because I am not gonna survive it's because the company is getting greedy.


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