# What's the Point of Tracking Your Income Expenses Per Mile?



## Jazzbaseball (Nov 22, 2014)

Which do you see as more important? The Cash Flow you receive or what your Income/Expense are on Paper based on Per Mile? 

Have you considered determining the replacement cost of the car instead of depreciation? Depreciation is a Paper Cost, meaning just something you note. It isn't an actual object. While replacement cost of a car is.


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## VictorD (Apr 30, 2017)

Maybe some of us enjoy the depression that sets in when we have the hard numbers to prove how little we actually make.


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## autofill (Apr 1, 2016)

Jazzbaseball said:


> Which do you see as more important? The Cash Flow you receive or what your Income/Expense are on Paper based on Per Mile?
> 
> Have you considered determining the replacement cost of the car instead of depreciation? Depreciation is a Paper Cost, meaning just something you note. It isn't an actual object. While replacement cost of a car is.


I hope you're kidding. If you drive more miles than what you getting paid for, you are not making any money.


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## Jazzbaseball (Nov 22, 2014)

autofill said:


> I hope you're kidding. If you drive more miles than what you getting paid for, you are not making any money.


I'm not kidding.

Depreciation is subjective. Every car is different.

I measure my cash flow and look at the replacement cost of a car.


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## oldfart (Dec 22, 2017)

I agree, depreciation is not important. Reserves for replacement is.



autofill said:


> I hope you're kidding. If you drive more miles than what you getting paid for, you are not making any money.


I think most of us (maybe all of us) drive more miles than what we are paid for,,,


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## Castaneda7189 (Apr 14, 2017)

autofill said:


> I hope you're kidding. If you drive more miles than what you getting paid for, you are not making any money.


When I had a used Prius I would definitely drive more than I made. I would go down to the Airport and hustle back putting dead miles. The car was only 3K and put a total of 250,000 with the he odometer reading 400K. The engine went caput and I made around 44K in those two years. Minus gas and a new set of tires with oil changes. I probably netted 35K. Also helped with college tuition. Didn't lose a dime. It's very much relative.


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## bsliv (Mar 1, 2016)

Jazzbaseball said:


> Which do you see as more important? The Cash Flow you receive or what your Income/Expense are on Paper based on Per Mile?
> 
> Have you considered determining the replacement cost of the car instead of depreciation? Depreciation is a Paper Cost, meaning just something you note. It isn't an actual object. While replacement cost of a car is.


If one replaces their car with the same type and cost of car, replacement cost = depreciation.

I bought a $24,000 car 3 years and 20,000 miles ago. Its worth half of that now. Where did the $12,000 go? Depreciation. What is my replacement cost? $12,000. It depreciated $0.60 per mile. Add in the cost of gas, insurance, licenses, maintenance, repairs, etc., and I can't make a profit when Uber pays $0.60 per mile. My cash flow might look good but I'd lose money every paid mile driven. I'd lose more every non-paid mile driven. I stopped driving after analyzing the data. (It was a new car and lost a lot on the first mile driven off the lot. It lost a little less on the 2nd mile and a little less on the 3rd mile, etc.)

If I drive 20 miles a week for Uber and 200 miles a week for personal, what is my replacement cost? I don't know. But I do know it cost me about $0.30 per mile to operate my car. So I know $6 a week is a cost to drive for Uber.

Does a farmer consider the cost of a tractor when calculating their income? Of course. He could use market value, straight line, or any number of ways to calculate depreciation. Its a cost to the farmer as much as the cost of seeds or labor. He may buy a new tractor once every 50 years, it doesn't matter. Its still a business expense.

If the farmer only calculates his profit on a 50 year basis and a tractor lasts 50 years, depreciation is 100%. He doesn't need to know how much it depreciated the first year or the second, etc. But most of us calculate our income/profit on a daily, weekly, monthly, or yearly basis. An asset which lasts longer than our period should be analyzed for that period.



Castaneda7189 said:


> When I had a used Prius I would definitely drive more than I made. I would go down to the Airport and hustle back putting dead miles. The car was only 3K and put a total of 250,000 with the he odometer reading 400K. The engine went caput and I made around 44K in those two years. Minus gas and a new set of tires with oil changes. I probably netted 35K. Also helped with college tuition. Didn't lose a dime. It's very much relative.


There aren't many $3k cars that will last 250,000 miles. There are even fewer that will go to 400k. And fewer still that will only require oil changes and tires. Find me a car that will go to 400k without repairs or regular maintenance for $3k and I'll pay you $6k. I won't pay a dime until it reaches that mileage. Any takers?

I have a vehicle with less than 200k on it. I do regular maintenance as spelled out in the owner's manual. I've also had to replace the transmission, water pump multiple times, fuel pump, fuel injectors, several batteries, vacuum hoses, egr valve, air filters, shocks, door hinges, floor mats, power window motor, alternator, and probably many things I can't remember. If I attempt another 200k I'd probably end up with a new vehicle except the frame. There is no depreciation but repair costs are more expensive. The cost to drive my 200k mile vehicle is about the same as my 20k mile vehicle.

There is no free lunch.


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## Jazzbaseball (Nov 22, 2014)

Replacement Cost does not equal Depreciation.

Car cost $25K then it costs $25K to replace. Then you set money aside from your earnings to replace that car. It's up to you to determine when tiy might replace the car.

The Dpreciation Rate decreases based on how many miles the car has. In the first 30,000 miles you have more depreciation then you would between something like 50K and 75K miles. (Unless you're using a straight line methind.)

With that in mind I don't see how you can say depreciation equals replacement.

To me, replacement is an actual expense to your cash while depreciation is only an expense on paper used to reduce your tax liability.


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## bsliv (Mar 1, 2016)

Jazzbaseball said:


> Replacement Cost does not equal Depreciation.
> 
> Car cost $25K then it costs $25K to replace. Then you set money aside from your earnings to replace that car. It's up to you to determine when tiy might replace the car.
> 
> ...


I'll explain.

Car costs $24,000. It depreciates $12,000. That means I have $12,000 in equity. If I want another $24,000 car and mine is only worth $12,000, what is my replacement cost? $12,000.

Tractor costs $50,000 and lasts 50 years until its worthless. Farmer uses it for 50 years. It depreciated 100% or $50,000. What is his replacement cost?

Replacement cost is not a term I'm familiar with. I do understand physical, functional and external depreciation.

I could also teach a class on valuing a piece of property, real or personal. One can use a sales comparison approach to value. That involves analyzing what similar items sold for. One can use the cost approach to value. That involves determining what it would cost to build a replacement, less depreciation. One can use the income approach to value. That is typically for investors, how much would one pay in order to receive a stated return on the investment.

One may look at a piece of property (watch, phone, car, house, etc) and come up with a value in seconds. I may come up with the same result. But it will typically take me 8 hours to develop my opinion of market value. Ever watch Antiques Roadshow on PBS?

Whether or not you recognize it, cars depreciate. Depreciation is a negative on the balance sheet.


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## Jazzbaseball (Nov 22, 2014)

bsliv said:


> I'll explain.
> 
> Car costs $24,000. It depreciates $12,000. That means I have $12,000 in equity. If I want another $24,000 car and mine is only worth $12,000, what is my replacement cost? $12,000.


It's 24,000 because you have to replace the car. Not resell it.


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## bsliv (Mar 1, 2016)

Jazzbaseball said:


> It's 24,000 because you have to replace the car. Not resell it.


This is not a tough concept. My car is worth $12k. I want a car that costs $24k. How much cash will I have to come up with to replace my current car with a new car?


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## Jazzbaseball (Nov 22, 2014)

I understand Replacement Cost to be for the entire car, not part of it. 

This is exactly how we did things in Property Management. We figured out the replacement cost of the appliance and still depreciated them for the tax benefit. 

The Replacement Cost is meant to be there to replace the entire item, not just part of it. 

I'm not going to keep going in circles, so we'll just have to agree to disagree.


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## bsliv (Mar 1, 2016)

Jazzbaseball said:


> I understand Replacement Cost to be for the entire car, not part of it.
> 
> This is exactly how we did things in Property Management. We figured out the replacement cost of the appliance and still depreciated them for the tax benefit.
> 
> ...


I'll agree you are not understanding.

I'm replacing a complete car. The car is worth $12k after $12k of depreciation.

If my $24k car depreciated 50% ($12k) it would cost me $12k to replace the car ($24,000 cost of the new car - $12,000 the value of my current car).

If my $24k car depreciated 100% ($24k) it would cost me $24k to replace the car ($24,000 cost of the new car - $0 the value of my current car).

If my $500 stove depreciated 100% ($500) it would cost me $500 to replace the stove.

If my $500 stove depreciated 50% ($250) you probably wouldn't replace it. Or you would sell it for what its worth, $250. Therefore, to replace the half used up stove would be $250. Maybe $250 isn't worth your time. But add a zero or two or three and it suddenly becomes very important.


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## Castaneda7189 (Apr 14, 2017)

bsliv said:


> If one replaces their car with the same type and cost of car, replacement cost = depreciation.
> 
> I bought a $24,000 car 3 years and 20,000 miles ago. Its worth half of that now. Where did the $12,000 go? Depreciation. What is my replacement cost? $12,000. It depreciated $0.60 per mile. Add in the cost of gas, insurance, licenses, maintenance, repairs, etc., and I can't make a profit when Uber pays $0.60 per mile. My cash flow might look good but I'd lose money every paid mile driven. I'd lose more every non-paid mile driven. I stopped driving after analyzing the data. (It was a new car and lost a lot on the first mile driven off the lot. It lost a little less on the 2nd mile and a little less on the 3rd mile, etc.)
> 
> ...


I don't care enough to find you one. That's my experience though. My experience doesn't encompass all of humanities experience. So stop with the generalization. That was my experience, so take it a such. I'll give you a tip though. Go on car gurus and find a used Toyota Prius for under 5K. You'll find plenty.


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## oldfart (Dec 22, 2017)

Jazzbaseball said:


> Replacement Cost does not equal Depreciation.
> 
> Car cost $25K then it costs $25K to replace. Then you set money aside from your earnings to replace that car. It's up to you to determine when tiy might replace the car.
> 
> ...


You are right to say replacement cost is not the same as depreciation. But that's not the whole story.

The rest of the story is that depreciation isn't important. But having a reserve fund to replace the the car is.

I bought my car when it was 5 years old with 50000 miles and paid $25000. i drove it for 2 years years and added 20000 miles. I then put it into rideshare. And I estimated the value at that time to be $18000.

I expect (hope) that car will last me 3 years in rideshare. As see it. There are 3 approaches to depreciation I could take 1) straight line depreciation $6000 a year. So each month set


bsliv said:


> I'll agree you are not understanding.
> 
> I'm replacing a complete car. The car is worth $12k after $12k of depreciation.
> 
> ...


Too many folks dont consider the salvage value in their planning.. or over estimate it, .. My suggestion is to have a reserve fund from day one big enough to replace the car..but still add to it each month and remember even if your current car craps out sooner than expected, you dont have to replace it with something of the same value. You can go down if you have to or go up if you if you have the cash



bsliv said:


> I'll explain.
> 
> Car costs $24,000. It depreciates $12,000. That means I have $12,000 in equity. If I want another $24,000 car and mine is only worth $12,000, what is my replacement cost? $12,000.
> 
> ...


Of course cars depreciate but thats just not an important number to develop (except for tax purposes). .. whats important is what are you going to do to replace that tractor that cost you $50000 50 years ago... ...Chances are the new one you want will cost closer to $200000 So even if you built a reserve account that grew at the same rate the old tractor depreciated, you wont be able to get next years crop out of the ground. You need to look at tractor prices every so often and goose-up your contributions to keep up with rising prices,, or be willing to buy a less expensive tractor than the one you want and need for your operation

Condo associations have to do this.. they do analysis most every year...(at least the good ones do) Roofs have to be replaced every 20 years or so, They project future costs, deduct whats already in the fund, divide by the number of years they think they have left in the old roof, divide by the number of owners, and send out the bills. I imagine if the reserve fund is only as big as what the last roof cost (20 years ago) there will be a special assessment and some really unhappy owners

We need to go through the same process with our cars ( at least I think the full timers need to) I want to buy a $40000 car in 3 years and I have $4000 in the bank.... SoI need to put $1000 a month in a reserve fund... For tax purposes this is not an expense.. (depreciation is what to deduct for taxes) its income but if you dont set it aside you are not going to stay in business beyond the life or your current car

Thats why I say, depreciation is a real thing and its a loss and you ought to keep track of it, its not important to the success of your business Whats important is a replacement fund


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## bsliv (Mar 1, 2016)

oldfart said:


> You are right to say replacement cost is not the same as depreciation. But that's not the whole story.
> 
> The rest of the story is that depreciation isn't important. But having a reserve fund to replace the the car is.
> 
> ...


I purposely ignored inflation for the purpose of simplicity.

If one has a $20k car and they want a $40k car that's more than just a replacement, its an upgrade. Let's imagine you have an account we'll a replacement account. You have a car that's worth $40k today and you want another $40k car in 2 years. As you drive your existing car, its value goes down due to depreciation. *If you add the depreciation amount into your replacement account, you'll always have $40k in value between the car and the account at any point in time. *

If you want to replace your existing car with an upgraded car, that's a different story. If you're willing to accept a less expensive car, its a different story. Ignoring inflation, depreciation = replacement cost, not upgrade cost.

Having said that, its nearly impossible to accurately track depreciation over a short period of time and/or miles. Market conditions change.

Think like an accountant. As an asset loses value, that loss must be categorized as an expense in order to balance the books. After subtracting all the expenses from the gross you can determine if the goals were met.


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## oldfart (Dec 22, 2017)

bsliv said:


> I purposely ignored inflation for the purpose of simplicity.
> 
> If one has a $20k car and they want a $40k car that's more than just a replacement, its an upgrade. Let's imagine you have an account we'll a replacement account. You have a car that's worth $40k today and you want another $40k car in 2 years. As you drive your existing car, its value goes down due to depreciation. *If you add the depreciation amount into your replacement account, you'll always have $40k in value between the car and the account at any point in time. *
> 
> ...


Thinking like an accountant is, what I think gets so many uber drivers in trouble. They have the numbers all properly entered in their spreadsheets.. and they know their #1 asset (the car) is depreciating and this depreciation is a hit to their earnings. and they also know that their asset will, sooner or later become worthless.

So their books are balanced perfectly in their head and on paper, and maybe they have actually built a reserve account to match exactly the depreciation of their car

The problen is,, what do they do when it comes time to replace the car and there isnt enough money in the fund

I contend that rather than building that reserve account at the sane rate as the car is depreciating and to the same amount as the original value of the car. You need to have your eye on what that new car is going to cost. understand depreciation but also understand what its going to cost to replace that asset and build your reserves accordingly


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## UberDriverGIG (Nov 21, 2018)

Jazzbaseball said:


> Which do you see as more important? The Cash Flow you receive or what your Income/Expense are on Paper based on Per Mile?
> 
> Have you considered determining the replacement cost of the car instead of depreciation? Depreciation is a Paper Cost, meaning just something you note. It isn't an actual object. While replacement cost of a car is.


You will learn the hard truth once taxes are due


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## Jazzbaseball (Nov 22, 2014)

UberDriverGIG said:


> You will learn the hard truth once taxes are due


You mean the $10,000 refund I had last year?


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## oldfart (Dec 22, 2017)

UberDriverGIG said:


> You will learn the hard truth once taxes are due


I think thats the point... depreciation is only important at tax time,

and most of us dont even think about our depreciation schedule, we just use the standard mileage deduction


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## Jay Dean (Apr 3, 2015)

Everything has been costed down to the penny with U/L for as low as they can get away with to make it appealing to the pax, and drivers ARE driving into the negative. There is no actual profit, except during surge times but that is a mirage and even that has been ransacked to the point it is laughable with the new app. This job or I should say gig is for people that are either A. looking for another job and need money fast. B. Bored. C. Have a POS car like mine and just hope it runs, only reason I make a marginal profit is I have a master mechanic friend that cuts me deals. Lets see D?

It is a scam, the longer it goes on hopefully the more it gets exposed. So far there has not been enough evidence (somehow) to show just how bad of a deal this is.

I will say though that Uber Black appears to be profitable, so there is that exception. But X? Forget it, it is a complete scam. Simply trading car value for instant cash.


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## oldfart (Dec 22, 2017)

Jay Dean said:


> Everything has been costed down to the penny with U/L for as low as they can get away with to make it appealing to the pax, and drivers ARE driving into the negative. There is no actual profit, except during surge times but that is a mirage and even that has been ransacked to the point it is laughable with the new app. This job or I should say gig is for people that are either A. looking for another job and need money fast. B. Bored. C. Have a POS car like mine and just hope it runs, only reason I make a marginal profit is I have a master mechanic friend that cuts me deals. Lets see D?
> 
> It is a scam, the longer it goes on hopefully the more it gets exposed. So far there has not been enough evidence (somehow) to show just how bad of a deal this is.
> 
> I will say though that Uber Black appears to be profitable, so there is that exception. But X? Forget it, it is a complete scam. Simply trading car value for instant cash.


My car value was about $18000 when I started with uber a year ago. I have grossed $1000 a week on average So about $50000 and spent $11000 on gas and oil and brakes So net cash flow has been $39000. My car is worth significantly less now, Lets say its only worth $3000 now

So I have traded $15000 in car value for $39000 in instant cash

and next year, assuming the same income and expenses and assuming my car's value drops to zero I will trade $3000 in car value for $39000

and for the third year ; the car is worth nothing (but it still runs) so Ill be trading $0 car value for $39000

These are not bad trades

Uber is what it is and there are a lot of reasons not to do it, and Im sure there are a lot of drivers that cant figure out how to make it work......but its not a scam


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## Jay Dean (Apr 3, 2015)

oldfart said:


> My car value was about $18000 when I started with uber a year ago. I have grossed $1000 a way eek on average So about $50000 and spent $11000 on gas and oil and brakes So net cash flow has been $39000. My car is worth significantly less now, Lets say its only worth $3000 now
> 
> So I have traded $15000 in car value for $39000 in instant cash
> 
> ...


I would say there are exceptions in markets and for those that drive at 4am with no health insurance and at any point hitting another car with a pax in your car and getting sued through the nose it might seem appealing, but the risk is insanely high in those particular niche markets, I am in Austin where the economy is the strongest in the nation and currently there are so many drivers it is CLEARLY a scam vs wait time for a ping and I drive a POS car. I can't remember the current rate for wear and tear for jobs I think it's .80 cents a mile, (not sure can't remember would love that stat to compare )and unless you have stacked pings you are barely covering the expense vs wait time (if that) and in this case it is up to a 1hr wait.

This is where the rate is reasonable considering the rest of the nations rates. By far and large Uber in its entitety of "X" is a scam.

Did you set aside money for the many other things? Struts, flushes, and about 50 other things (someone made a list here I can find) you are wearing out using that car as a commercial vehicle?


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## emdeplam (Jan 13, 2017)

two trains are headed towards each other. They are 35 miles apart. Train A...........


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## Z129 (May 30, 2018)

emdeplam said:


> two trains are headed towards each other. They are 35 miles apart. Train A...........


Both trains crash. It is inevitable.


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## emdeplam (Jan 13, 2017)

Z129 said:


> Both trains crash. It is inevitable.


wrong they will depreciate long before they intersect as the owners did not reserve for repairs per IRS rules


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## Z129 (May 30, 2018)

emdeplam said:


> wrong they will depreciate long before they intersect as the owners did not reserve for repairs per IRS rules


Lol! Casey Jones survives!


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## oldfart (Dec 22, 2017)

Jay Dean said:


> I would say there are exceptions in markets and for those that drive at 4am with no health insurance and at any point hitting another car with a pax in your car and getting sued through the nose it might seem appealing, but the risk is insanely high in those particular niche markets, I am in Austin where the economy is the strongest in the nation and currently there are so many drivers it is CLEARLY a scam vs wait time for a ping and I drive a POS car. I can't remember the current rate for wear and tear for jobs I think it's .80 cents a mile, (not sure can't remember would love that stat to compare )and unless you have stacked pings you are barely covering the expense vs wait time (if that) and in this case it is up to a 1hr wait.
> 
> This is where the rate is reasonable considering the rest of the nations rates. By far and large Uber in its entitety of "X" is a scam.
> 
> Did you set aside money for the many other things? Struts, flushes, and about 50 other things (someone made a list here I can find) you are wearing out using that car as a commercial vehicle?


I gave you my actual numbers for the last year $18000 car, $50000 income , $11000 expenses.. I then looked at things the way you suggested we do ie trading equity for income.....and concluded it was a good trade

Now you want to add something else to the equation... ie unanticipated repairs I told you I deducted $15000 from my actual income for lost value in my car.... I can use some of that for repairs if needed. In other words I plan to do repairs and maintenance out of cash flow but I do have money set aside, just in case. There is $10,000 for unanticipated repairs and $30000 for the new car.

The message is, hope for the best and plan for the worst... My last two cars went to over 250000 miles with nothing but scheduled maintenance and a $2000 repair, so my hope is Ill do as well with this car, but I have $40000 in the bank if it dosent

Your 80 cents a mile figure for wear and tear is nonsense, You dont know me so let me tell you that Im not impressed with numbers you pull out of your ass....especially when my considerable experience tells me something else. I want to see some citations

By the way, waiting an hour between pings will certainly impact your earnings, but there are no expenses and no wear and tear while you wait. If you want to talk about income potential. we can do that, but if we are talking about expenses, wear and tear or depreciation, lets do that



emdeplam said:


> wrong they will depreciate long before they intersect as the owners did not reserve for repairs per IRS rules


There is no IRS rule that says you have to have a reserve account



emdeplam said:


> wrong they will depreciate long before they intersect as the owners did not reserve for repairs per IRS rules


There is no IRS rule that says you have to have a reserve account Thats a "common sense" rule


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## emdeplam (Jan 13, 2017)

There is no IRS rule that says you have to have a reserve account Thats a "common sense" rule[/QUOTE]

26 U.S. Code § 807 - Rules for certain reserves see sub section C


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## Jay Dean (Apr 3, 2015)

I need to find the basic calculation the government and jobs use for per mile, I haven't been updated at the current rate for 2018. But you have money set aside currently for every car part of your car that you are wearing down? I will get that number and can compare, since yeah I did pull it out of my ass I think that rate was about 15 years ago, but I assure you it is FAR higher then what you are figuring in with your current wear and tear for your vehicle. You are not at all profiting what you think, or at least what jobs are considering the rate per mile, or the government calculates as basic per mile for wear and tear, let alone profit.


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## oldfart (Dec 22, 2017)

emdeplam said:


> There is no IRS rule that says you have to have a reserve account Thats a "common sense" rule


26 U.S. Code § 807 - Rules for certain reserves see sub section C[/QUOTE]

If you are an insurance company and offer life insurance policies you must maintain certain reserves to pay out the death benefits

I don't see how that IRS rule applies to Uber drivers that may or may not maintain reserve accounts to cover unanticipated repairs and to buy a new car when the old one craps out

There are also rules that require condominium associations to maintain reserves for certain anticipated replacement items, like a new roof 
Those rules don't apply to Uber drivers either


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## dauction (Sep 26, 2017)

I simplified it for myself... I always have a Car Payment ..no matter working for uber or not , I'm always buying and selling and running a car payment . For ME the difference is that NOW as a Rideshare driver (part time) I essentially am writing off MOST of my Car Payment (most because MOST of the Miles come from rideshare instead of backforth to work/shopping etc)....................


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## oldfart (Dec 22, 2017)

Jay Dean said:


> I need to find the basic calculation the government and jobs use for per mile, I haven't been updated at the current rate for 2018. But you have money set aside currently for every car part of your car that you are wearing down? I will get that number and can compare, since yeah I did pull it out of my ass I think that rate was about 15 years ago, but I assure you it is FAR higher then what you are figuring in with your current wear and tear for your vehicle. You are not at all profiting what you think, or at least what jobs are considering the rate per mile, or the government calculates as basic per mile for wear and tear, let alone profit.


The government number is 54.5 cents per mile. This is the standard deduction they allow for business use of a car and includes all the expenses of operating and owning the vehicle gas, oil, repairs and depreciation among them

We can use this number or our actual number whichever is greater when preparing our taxes

Even if we use the irs number for taxes, Common senses tells us that we should keep a record of our actual expenses for business planning purposes and, as some have said here, to determine if it's worth it to continue this venture

The point is that your actual expenses are likely to differ from the IRS number. And for you to say my expenses are the same as the irs number is nonsense

we don't know what our actual expenses are each year until the year is over, We can make an educated guess in January but we won't know until December

And regarding what is probably the biggest component of our expenses (the cost of the vehicle itself) it's different for all of us and you certainly don't know my deprecion schedule until I tell you

Here are my actual expenses for 2018
Gas $10500
Oil changes $600
Brakes $400
Car washes $100
Supplies (paper towels, windex etc) $200
Insurance $2400
Depreciation $6000

Total $20209

I didn't include certain business expenses like a home office deduction and phone and office supplies etc because at least so far this is a side gig and not a real business yet. Next year will be different and because the subject of this post is to compare the irs standard deduction to actual vehicle expenses not to offer a class in tax return preparation for Uber drivers

Compare my actual number for 2018 to the irs number $0.545 x 70000 miles = $38150. And it's clear that I'll be using the irs number

Regarding my depreciation schedule: you might ask how I came up with that. I started uber with a car I estimated to be worth $20000 and I planed to drive it 70000 miles a year for 3 years at which time I'm planning to replace it. It will have nearly 300000 miles on it at that time and I estimate salvage value will be $2000. So $20000 -$ 2000 = $18000
$18000/3= $6000

The point is the irs number is not anyone's actual expense and here's the big thing. Although we have to anticipate and plan for lots of things like tires, struts, belts, hoses etc these are not actual expenses until you spend the money. Developing a maintenance schedule and plan and a plan to replace the vehicle at some point is a whole different subject. Suffice it to say that I suggest you start a reserve account and set aside money each month

I should say at this point, I'm not a tax accountant or lawyer but I have been doing tax returns for my self and a series of small businesses over the last 50 years most of which had vehicle expense deductions. And sime where I used accelerated depreciation schedules for real estate I had professional help on some of these returns and I have been audited more than once (where I learned that I was doing things right most of the time

Bottom line here is I know what I'm doing and what I'm doing works for me, but don't take my word for it, talk to your own accountant



dauction said:


> I simplified it for myself... I always have a Car Payment ..no matter working for uber or not , I'm always buying and selling and running a car payment . For ME the difference is that NOW as a Rideshare driver (part time) I essentially am writing off MOST of my Car Payment (most because MOST of the Miles come from rideshare instead of backforth to work/shopping etc)....................


be careful with that car loan. So many loans these days se for 5 + years. It the rate I drive rideshare my car will be toast in 3 years

I'd hate to be making a big car payment for a car that's in a junk yard somewhere

Oh and don't tell your lender you are using the car for rideshare. They may call the loan


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## dauction (Sep 26, 2017)

oldfart said:


> The government number is 54.5 cents per mile. This is the standard deduction they allow for business use of a car and includes all the expenses of operating and owning the vehicle gas, oil, repairs and depreciation among them
> 
> We can use this number or our actual number whichever is greater when preparing our taxes
> 
> ...


 Morning OLdfart....My Lender knows because my insurance lists Rideshare ... Part Time driving I did 13k miles this year ...so looking at roughly 50-55k miles at 4 years ... Then I retire from Driving City Bus and still only do rideshare part time ... looking at staying under 25k miles (rideshare and leisure)

4 years Lincoln MKZ with 110-130K miles ..should still be able to pull 4k-5k out of it


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## oldfart (Dec 22, 2017)

dauction said:


> Morning OLdfart....My Lender knows because my insurance lists Rideshare ... Part Time driving I did 13k miles this year ...so looking at roughly 50-55k miles at 4 years ... Then I retire from Driving City Bus and still only do rideshare part time ... looking at staying under 25k miles (rideshare and leisure)
> 
> 4 years Lincoln MKZ with 110-130K miles ..should still be able to pull 4k-5k out of it


My advice was be careful about borrowing and rideshare,

You obviously know what you are doing. My father used to say, "have a plan and work your plan". He would have been pleased

I know a guy that borrowed to buy a $40000 used car. His payments are over $800 a month
For 6 years And he drives more than I do. I believe he's gonna still be making payments on the thing as it's being towed off to the junk yard. But he knows what he is doing He has a reserve fund with enough money in it to pay off the loan at any time and to buy a new car when needed. He's a OPM kind of guy H uses other people's money and keeps his in the bank

It's all good


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## Jay Dean (Apr 3, 2015)

If you make this a job in a market that has a niche it makes sense but you are getting up at 4am yeah? And driving through the day you are putting yourself at a huge risk of an accident and I'm pretty sure you have to be seasonal to make your money which takes a lot of energy. Nobody should try and make Uber as a job unless you are fully invested and live eat and breathe the schedule. So for that is another reason it is a scam, it sets people up to thinking it can replace a job. That is great you get up at 4 and have made Uber your career and figured things out my point is to the majority of people driving it is a scam and the 94% quit rate and the drivers that work regular jobs will tell you it puts you in the negative, unless you drive the worst hours possible that conflicts with a healthy lifestyle, which to me is an additional scam of life.

It's been so costed down that it is a scam unless you devote our life to timing it out and work at 4am putting yourself at risk of tired drivers and other drunks on the road going home. Hopefully you don't get hit or hit anyone in your future endeavors doing this scam

And that cost estimate is wear and tear not car washes, vacuums or hell even oil changes I imagine, registration,inspection

What do you think JustTreatMeFair is there actually this much profit to be made? That is if you game it to work the airport runs and time it with X?


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## Disgusted Driver (Jan 9, 2015)

Omg, another thread of people expounding and bloviating about how depreciation isn't real. It's ok to be ignorant but that doesn't mean you are right.


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## Jay Dean (Apr 3, 2015)

Disgusted Driver said:


> Omg, another thread of people expounding and bloviating about how depreciation isn't real. It's ok to be ignorant but that doesn't mean you are right.


Scams take a long time to uncover, Martha Stewart was SHOCKED of dirty floors, but did she look at the X rate per mile? That why I can't wait until someone with celeb status puts it in maths terms and it goes viral, but...what are the odds? People don't listen to smart people, they listen to celebs, we need more Martha Stewart scenarios lol Just ones that can do a reflection instead of how they were personally moved or offended etc


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## autofill (Apr 1, 2016)

oldfart said:


> I think most of us (maybe all of us) drive more miles than what we are paid for,,,


If you're earning less than 50 cents per total miles driving for Uber then you are driving for free. I set 75 cents per total miles driven as my minimum and if I see it's less than that, I log off and go home.


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## oldfart (Dec 22, 2017)

autofill said:


> If you're earning less than 50 cents per total miles driving for Uber then you are driving for free. I set 75 cents per total miles driven as my minimum and if I see it's less than that, I log off and go home.


My actual expenses are 20 cents a mile. If I factor in a reserve account, 30 cents. So 50 cents a mile still makes me money.

I'm not worried about one day every once in a while that comes in at 50 cents. I keep track of weeks. I've been doing this for 1 year now and have never had a weekthat low. I am in a fairly small market with a "season." Winter was great to me; summer not so much. I averaged about 70 cents per mile (total miles over the year)


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## 155839 (Jul 28, 2018)

It's pretty simple. 
As has previously been noted by a few, if a vehicle that cost you $24,000 is now worth $12,000 after 3 years, the replacement cost will be $12,000. ($24,000 - $12,000 trade-in). It will also have depreciated $4,000/yr. (if you split the years evenly vs amortizing.)
Those two things, replacement and depreciation, are not mutually exclusive.
In terms of calculating net annual earnings, you would deduct the $4,000 depreciation, plus vehicle maintenance, fuel, cleaning supplies, webcam, phone mounts, cables, and any other ridehail-related expenses, from your gross earnings. 
To figure out your per-mile expense, just divide the total vehicle expenses above by the number of miles you drive for ridehail. (For me, I include dead miles waiting for pings.)
For many drivers, who bought an older, high-mileage POS, their cost per mile will be far lower than the IRS standard of .54.5c/mile. For owners of new/newer vehicles it may even be higher, depending on the vehicle.


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## 14er (Nov 26, 2018)

3 years over $7200 in repairs 120K miles

older vehicle all original parts but before uber filled up tank every 2 months, after uber every 2 days

3500+ rides

in my basic math rounding down every rider causes about $2 in future repair/maintenance costs.

$2 is minimum gas per ride

so for me its $4 minimum to turn my key

pretty much every ride not going to the airport is not worth my time. those are 90% of my trips i leave house & dead head back in about an hour & 10 minutes, now 15 as I go 70mph instead of the 80 I used to, to get back some of last pay cut

costs me $8 round trip gas, plus $2 future maintenance so $10 for airport rides that gross $50-85

I don't really think of miles or minutes but trips

If it grosses $10 you're making money if not you're losing money.

If I arrive & its not $10 you're getting cancelled on period unless i just cancelled 3 or 4 back to back period

i dont work for free or keep soreadsheets tracking pennies its not rocket science


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## FrankLStanton (Oct 18, 2016)

... with the trend of reducing the mileage rates and increasing time rates, people will now track their hourly rates and be happy if they are making $10/hour!


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## Disgusted Driver (Jan 9, 2015)

FrankLStanton said:


> ... with the trend of reducing the mileage rates and increasing time rates, people will now track their hourly rates and be happy if they are making $10/hour!


The reality from looking at some facebook groups is that there are a number of people who are happy that they are making $12 an hour BEFORE vehicle expenses. Attempts to educate them are brushed off in a wave of positive thinking. I can't and don't want to compete with that. So I've adapted, drive less, drive select mostly, only go out at peak times. I'm still grossing $20 to 30 an hour BUT it's for less and less hours a week.


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