# Under reporting of standard mileage deduction



## Mike Morris (Oct 26, 2015)

If you are choosing the standard mileage deduction, are you required to report ALL of your eligible miles, or are you allowed to deduct only up to the point that you no longer show a loss?

In my case, which I'm sure may be the same for many others, my mileage deduction is way over my total taxable earnings.

I've only been doing this part-time for a month so far to help compensate for my large daily commute to my regular 9-5 job, so I will have other taxable income at the end of the year.

I'm just not sure if it's better to report everything, including the loss, and take the risk that the IRS states that this is not a viable business and won't let me take deductions in the future, which I assume would require me to pay taxes on any Uber income without being able to take deductions, or is it better to under report my deductions to at least show some profit so the IRS will treat this as a viable business?

Any words of wisdom would be greatly appreciated.


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## UberTaxPro (Oct 3, 2014)

Mike Morris said:


> If you are choosing the standard mileage deduction, are you required to report ALL of your eligible miles, or are you allowed to deduct only up to the point that you no longer show a loss?
> 
> In my case, which I'm sure may be the same for many others, my mileage deduction is way over my total taxable earnings.
> 
> ...


If you're miles are business miles and you can prove it why not take them all? You can use the loss to offset income from your real job. Most businesses (driving for Uber is a business) have losses in the early years. If you did the same thing for many years in a row it might raise an eyebrow with the IRS and they would classify your job as a hobby and not a business and take your deductions away. But the first year I don't think you have any worries and long as you can prove the business mileage with a contemporaneous mileage log and supporting evidence like your Uber account records. To answer your question, no you don't have to take deductions you're entitled to.


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## Mike Morris (Oct 26, 2015)

UberTaxPro said:


> If you're miles are business miles and you can prove it why not take them all? You can use the loss to offset income from your real job. Most businesses (driving for Uber is a business) have losses in the early years. If you did the same thing for many years in a row it might raise an eyebrow with the IRS and they would classify your job as a hobby and not a business and take your deductions away. But the first year I don't think you have any worries and long as you can prove the business mileage with a contemporaneous mileage log and supporting evidence like your Uber account records. To answer your question, no you don't have to take deductions you're entitled to.


Thanks for the info. I believe I'm keeping a 'contemporaneous' mileage log. I log my odometer reading before I go 'Online' and log the odometer when I go 'Offline' on a daily basis in a spreadsheet, along with the detail of every trip taken.

Only reason I was debating not taking the full deductions I'm entitled to was to prevent the IRS from interpreting this as a hobby in the future. I'll probably report everything and take my chances. Thinking a few years out may be a little too long term with regards to me and this endeavor anyways. Primarily doing this to cover commute costs to/from my normal 9-5...but it's also nice to meet interesting people in the process.


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## UberTaxPro (Oct 3, 2014)

Mike Morris said:


> Thanks for the info. I believe I'm keeping a 'contemporaneous' mileage log. I log my odometer reading before I go 'Online' and log the odometer when I go 'Offline' on a daily basis in a spreadsheet, along with the detail of every trip taken.
> 
> Only reason I was debating not taking the full deductions I'm entitled to was to prevent the IRS from interpreting this as a hobby in the future. I'll probably report everything and take my chances. Thinking a few years out may be a little too long term with regards to me and this endeavor anyways. Primarily doing this to cover commute costs to/from my normal 9-5...but it's also nice to meet interesting people in the process.


With your detailed records you'll be fine. Even with losses year after year as long as you can prove you're making a serious attempt to make money the IRS would have a difficult time taking your deductions away. Here's a little more detail from turbo tax: https://turbotax.intuit.com/tax-too...sifies-Your-Business-as-a-Hobby/INF22852.html


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## David Pickett (Nov 2, 2015)

IRS says you can use losses back two years and forward 20: publications/p536/ar02 Make sure you tally up all your expenses and supporting mileage!


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## UberTaxPro (Oct 3, 2014)

David Pickett said:


> IRS says you can use losses back two years and forward 20: publications/p536/ar02 Make sure you tally up all your expenses and supporting mileage!


This could be the best reason for driving for Uber! LOL


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## David Pickett (Nov 2, 2015)

Because I drive for pickup and home so far, my Uber is at a loss so far, even before wash, phone, etc. I might have to learn to hover, perhaps somewhere with good wifi so I can chase my online life on my tablet.


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## UberTaxPro (Oct 3, 2014)

David Pickett said:


> Because I drive for pickup and home so far, my Uber is at a loss so far, even before wash, phone, etc. I might have to learn to hover, perhaps somewhere with good wifi so I can chase my online life on my tablet.


yep, most people on here are operating at a loss. But they keep doing it!


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## David Pickett (Nov 2, 2015)

It's just a tax loss. In reality, Uber helps pay for my car and cell phone, which might be considered underutilized otherwise, and augments my retirement income a bit. Insurance, maintenance and depreciation are still going on when a car is driven little. I could sell the car and Uber my way through life, but there is not enough Uber here, so I go the opposite way, and create more Uber!


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