# Tax Refund?



## BigNorm4Life

So I made an estimated $8500 doing Uber X since Memorial Day... My Mileage logs to this moment add up to just shy of 26,000 miles

So at 54 cents a mile equals to $14,040... I still got petty stuff to deduct like preventive maintenance repairs from the dealer, cell phone, etc.. still not sure if it's the mileage or the expenses or both that can be combined 

Am I looking at a potential large refund here I'm am I just looking at this way wrong


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## UberTaxPro

BigNorm4Life said:


> So I made an estimated $8500 doing Uber X since Memorial Day... My Mileage logs to this moment add up to just shy of 26,000 miles
> 
> So at 54 cents a mile equals to $14,040... I still got petty stuff to deduct like preventive maintenance repairs from the dealer, cell phone, etc.. still not sure if it's the mileage or the expenses or both that can be combined
> 
> Am I looking at a potential large refund here I'm am I just looking at this way wrong


Do you have another job?


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## BigNorm4Life

UberTaxPro said:


> Do you have another job?


No... this was a bad year for me, was laid off December of last year.. been looking for work since, I did have like 6 months of unemployment that's was already taxed as well.. that was like $8,xxx all together


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## UberTaxPro

BigNorm4Life said:


> No... this was a bad year for me, was laid off December of last year.. been looking for work since, I did have like 6 months of unemployment that's was already taxed as well.. that was like $8,xxx all together


I guess it depends on what you mean by "large". You most likely won't owe any income tax and might get back some or all of the tax taken out of your unemployment. You might want to carry over some or all of the $5000+ loss you'll have from your Uber business to next year.


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## BigNorm4Life

UberTaxPro said:


> I guess it depends on what you mean by "large". You most likely won't owe any income tax and might get back some or all of the tax taken out of your unemployment. You might want to carry over some or all of the $5000+ loss you'll have from your Uber business to next year.


I mean, I got some backed up bills I rather take care off as soon as possible

So I assume that $5000+ Loss would go to any if any tax liability I have for this year then what's left I get in the form of a refund?


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## Mars Troll Number 4

BigNorm4Life said:


> I mean, I got some backed up bills I rather take care off as soon as possible
> 
> So I assume that $5000+ Loss would go to any if any tax liability I have for this year then what's left I get in the form of a refund?


Basically... you will get almost every dime you already paid to the IRS back. The 54c a mile isn't deductible it's a deduction off your income.

Your income in total, including the 8,000 (rounding) from unemployement plus 8,500 on uber is a total of $16,500.

Your expenses are tax deductible so your take 16,500 and subtract 14,040 and you are at... $2,460.

On paper your INCOME for the year is 2,460.

Of anything you paid in taxes off the unemployment, most of it you will get back.

About further deductions... 
Anything that is a cost of operating an actual automobile is counted in the .54, EXCEPT TOLLS.

_If your new cell phone acts as both your business and personal phone, you are only allowed to deduct the portion used for business from your taxable income. It's important for you to hang on to your itemized phone bill and receipts to ensure that you're deducting the right amounts and to keep records of your deduction. _(per the turbo tax website)

Any food/mints/water you buy for your customer is also deductible.

Next year however you will neither owe anything in taxes nor get any kind of refund if you continue to operate Uber at the current rates with approximately the same ratio of unpaid to paid miles.


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## BigNorm4Life

Mears Troll Number 4 said:


> Basically... you will get almost every dime you already paid to the IRS back. The 54c a mile isn't deductible it's a deduction off your income.
> 
> Your income in total, including the 8,000 (rounding) from unemployement plus 8,500 on uber is a total of $16,500.
> 
> Your expenses are tax deductible so your take 16,500 and subtract 14,040 and you are at... $2,460.
> 
> On paper your INCOME for the year is 2,460.
> 
> Of anything you paid in taxes off the unemployment, most of it you will get back.
> 
> About further deductions...
> Anything that is a cost of operating an actual automobile is counted in the .54, EXCEPT TOLLS.
> 
> _If your new cell phone acts as both your business and personal phone, you are only allowed to deduct the portion used for business from your taxable income. It's important for you to hang on to your itemized phone bill and receipts to ensure that you're deducting the right amounts and to keep records of your deduction. _(per the turbo tax website)
> 
> Any food/mints/water you buy for your customer is also deductible.
> 
> Next year however you will neither owe anything in taxes nor get any kind of refund if you continue to operate Uber at the current rates with approximately the same ratio of unpaid to paid miles.


Yeah I'm done with Uber for the most part, if it's not surging or not a major city event I'm not messing with it anymore I just got my CDL and I got a job lined up in Jan. It painfully bothers me every day I put 30,000 miles on my very newish car for the freaking scraps I made

I was just surviving to help my girlfriend pay what we could to keep the lights on

So.. if I'm deducting my cell phone, it makes since to just deduct the unlimited data cost of the Total bill times 12


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## SEAL Team 5

BigNorm4Life said:


> Am I looking at a potential large refund here I'm am I just looking at this way wrong


You're looking at this the wrong way. Unless you paid taxes you can't get a refund.
One thing really caught my eye. Your miles to dollar ratio is horrible. You're driving over 3 miles for a dollar. That will definitely throw up a red flag with your itemized deductions.
And look into some of the advice your getting on here. Your self employment expenses are in no way deductible from your unemployment compensation.


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## BigNorm4Life

A lot of dead miles, I mainly worked the Jersey Shore 90% of the summer and Man let me tell you, I was up and down the shore non stop. I was commuting from Philly 

80% of my income so far was from the shore


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## SEAL Team 5

BigNorm4Life said:


> A lot of dead miles, I mainly worked the Jersey Shore 90% of the summer and Man let me tell you, I was up and down the shore non stop. I was commuting from Philly
> 
> 80% of my income so far was from the shore


I think you need to speak with a tax consultant. Many times accumulated miles don't start until your 1st designated stop. Your commute miles might not be deductible. You have to be very careful with this because the IRS has averages that they use for each state. And when you're coming in 3x the norm that will cause a red flag and may warrant an audit.


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## BigNorm4Life

SEAL Team 5 said:


> I think you need to speak with a tax consultant. Many times accumulated miles don't start until your 1st designated stop. Your commute miles might not be deductible. You have to be very careful with this because the IRS has averages that they use for each state. And when you're coming in 3x the norm that will cause a red flag and may warrant an audit.


I drove with the app on... sometimes I caught some rides along the way to minimize the dead miles... sometimes I was just hauling ass up the parkway and not a ping

If the app was on... think that's all fair game I assume


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## SEAL Team 5

BigNorm4Life said:


> I drove with the app on... sometimes I caught some rides along the way to minimize the dead miles... sometimes I was just hauling ass up the parkway and not a ping
> 
> If the app was on... think that's all fair game I assume


Should be. Uber payouts do show total time on line. But they only show the passenger miles, not total miles. You can probably ask an H&R Block rep for the true answer. Good luck.


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## UberTaxPro

SEAL Team 5 said:


> You're looking at this the wrong way. Unless you paid taxes you can't get a refund.
> One thing really caught my eye. Your miles to dollar ratio is horrible. You're driving over 3 miles for a dollar. That will definitely throw up a red flag with your itemized deductions.
> And look into some of the advice your getting on here. Your self employment expenses are in no way deductible from your unemployment compensation.


"Unless you paid taxes you can't get a refund" Believe it or not with the tax code the way it is now it's possible for some taxpayers to pay $0 in taxes and get a refund using the Earned Income Credit!


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## UberTaxPro

BigNorm4Life said:


> I mean, I got some backed up bills I rather take care off as soon as possible
> 
> So I assume that $5000+ Loss would go to any if any tax liability I have for this year then what's left I get in the form of a refund?


If you had other income and kept good records you could use the $5000+ to pay less taxes on the other income. Without the other income you can "carry over" the extra deductions to use in another year when your income is higher. Unless you qualify for the EIC you're not getting a refund this year. You won't qualify for the EIC because you'll have $0 earned income after deducting all your expenses.


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## UberTaxPro

BigNorm4Life said:


> I drove with the app on... sometimes I caught some rides along the way to minimize the dead miles... sometimes I was just hauling ass up the parkway and not a ping
> 
> If the app was on... think that's all fair game I assume


The question you need to answer is: Was hauling ass up the parkway an ordinary and necessary business expense? If you were being audited that is where the focus would be. Another question to ask yourself would be : If I wasn't operating my Uber business would I be hauling ass up the parkway anyway? Yes it's a gray area but it's more important than whether your app is on or not in the IRS's view of things.


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## Barbj379

Typically committing to/from your place of business are miles that don't count towards deductions, using either the Actual Costs method or the Standard Mileage method. With the standard mileage method you can't claim things like car maintenance, lease payments, garage fees, etc., because they're already figured into the $.56/mile deduction. Also, be aware that the amount of earned income reported on the Form 1099 by Uber is gross income. 

That isn't how much you actually received, it's how much you generated in sum over the fiscal year on the Uber platform. You'I'll need to add Uber's commission and safe ride fee(s) onto Schedule C - Deductions - of your tax return. This should yield a net income figure, which will
help maximize your returns; however, I seriously doubt you'll be getting $5k back from $8.5k in earnings. Especially after you adjust the number of deductible miles driven to exclude commuting miles. I made over $20k last year with Uber and broke even on my taxes, which were ~$5k owed to the government before expenses were applied. I did a lot research on this subject in the time since then.


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## Bluecrab

UberTaxPro said:


> If you had other income and kept good records you could use the $5000+ to pay less taxes on the other income. Without the other income you can "carry over" the extra deductions to use in another year when your income is higher. Unless you qualify for the EIC you're not getting a refund this year. You won't qualify for the EIC because you'll have $0 earned income after deducting all your expenses.


Hey UberTaxPro, I do uber part time and will also show a paper loss this year. I'll use it to offset taxable income from the day job. How many years can I do this? I believe I read somewhere the IRS doesn't like to see a business lose money three straight years. The idea being if you lose money each year it's not a business, but a hobby. (Uber as a hobby, that's rich). I'm around 30% totals taxes, for Fed/State/Local, so having a $3,000 loss is worth almost a $1,000 back for me.


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## UberTaxPro

Bluecrab said:


> Hey UberTaxPro, I do uber part time and will also show a paper loss this year. I'll use it to offset taxable income from the day job. How many years can I do this? I believe I read somewhere the IRS doesn't like to see a business lose money three straight years. The idea being if you lose money each year it's not a business, but a hobby. (Uber as a hobby, that's rich). I'm around 30% totals taxes, for Fed/State/Local, so having a $3,000 loss is worth almost a $1,000 back for me.


As long as you're making a legitimate attempt to earn money and keep good records you can deduct your business expenses indefinitely. Nobody likes to see a business lose money three straight years but it can happen and be for more than three years. If the IRS were to suspect you were Ubering mainly for the tax benefit (not that I think they would) you'd might have to prove that you were attempting to improve your business even though you were losing money each year. I would show them that you tried Ubering on different days of the week, tried different areas to drive, bought different kinds of candy, went to Uber meetings for advice etc.... I heard Trump say on TV tonight that one key to success is to never quit. We could just tell them you're following the President! He doesn't pay any income tax and he'll be the IRS's boss soon! Seriously, I wouldn't worry about it. Read about "hobby tax" for more info.


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## Mars Troll Number 4

Well the simple reality is that a great many uber drivers accross the country will be loosing money on paper. For what that is worth you will be right around average with your fellow uber drivers.


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## BurgerTiime

You only earned $2k and that's problem because the IRS says if you make less than $4k it's a hobbie: http://www.collegeplanningvirginia....EPORTING HOBBY INCOME AND LOSSES - 062612.doc
Careful how you work out your deductions and if anything this should show you that you're making less than min wage. Time to spend your time making money not losing it and wasting your time.


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## UberTaxPro

I really don't think Uber drivers need to worry much about this "hobby tax" issue but since we're talking about it..... The 'hobby tax' issue affects some border-line amature/professional race car drivers/owners for example.

The IRS considers 9 factors in determining whether your activity is a hobby or a business. 

Whether you carry on the activity in a businesslike manner.
Whether the time and effort you put into the activity indicate you intend to make it profitable.
Whether you depend on income from the activity for your livelihood.
Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
Whether you change your methods of operation in an attempt to improve profitability.
Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
Whether you were successful in making a profit in similar activities in the past.
Whether the activity makes a profit in some years and how much profit it makes.
Whether you can expect to make a future profit from the appreciation of the assets used in the activity.
https://www.irs.gov/uac/newsroom/five-basic-tax-tips-about-hobbies


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## Bluecrab

UberTaxPro said:


> As long as you're making a legitimate attempt to earn money and keep good records you can deduct your business expenses indefinitely. Nobody likes to see a business lose money three straight years but it can happen and be for more than three years. If the IRS were to suspect you were Ubering mainly for the tax benefit (not that I think they would) you'd might have to prove that you were attempting to improve your business even though you were losing money each year. I would show them that you tried Ubering on different days of the week, tried different areas to drive, bought different kinds of candy, went to Uber meetings for advice etc.... I heard Trump say on TV tonight that one key to success is to never quit. We could just tell them you're following the President! He doesn't pay any income tax and he'll be the IRS's boss soon! Seriously, I wouldn't worry about it. Read about "hobby tax" for more info.


I like the info and idea, thanks UTP. I'm a helluva business owner. My company loses money each year, just like our president's companies do.


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## Emerald43

UberTaxPro said:


> I really don't think Uber drivers need to worry much about this "hobby tax" issue but since we're talking about it..... The 'hobby tax' issue affects some border-line amature/professional race car drivers/owners for example.
> 
> The IRS considers 9 factors in determining whether your activity is a hobby or a business.
> 
> Whether you carry on the activity in a businesslike manner.
> Whether the time and effort you put into the activity indicate you intend to make it profitable.
> Whether you depend on income from the activity for your livelihood.
> Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
> Whether you change your methods of operation in an attempt to improve profitability.
> Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
> Whether you were successful in making a profit in similar activities in the past.
> Whether the activity makes a profit in some years and how much profit it makes.
> Whether you can expect to make a future profit from the appreciation of the assets used in the activity.
> https://www.irs.gov/uac/newsroom/five-basic-tax-tips-about-hobbies


So maybe I am oversimplifying this. But from what I am reading is if Uber was considered your "hobby" you basically can't claim it as a loss. Only as a wash. I only made about $1100 this year from about June till last week. Worked Friday and Saturday nights, and on average I drove about 6 hours a weekend. I know you said we shouldn't worry about the whole hobby tax. However I seem to be answering in the hobby camp for most of those questions. I do have a full time job. I never changed my business practices. I was in a massive amount of credit card debt when I was in between jobs which is why I decided to take this gig on. Am I right in stating that the only difference in hobby vs. business is that you can't claim a loss as a hobby but you can break even? Also I know this is the very question you wanted to avoid answering, but would my case be considered a hobby?


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## UberTaxPro

Emerald43 said:


> So maybe I am oversimplifying this. But from what I am reading is if Uber was considered your "hobby" you basically can't claim it as a loss. Only as a wash. I only made about $1100 this year from about June till last week. Worked Friday and Saturday nights, and on average I drove about 6 hours a weekend. I know you said we shouldn't worry about the whole hobby tax. However I seem to be answering in the hobby camp for most of those questions. I do have a full time job. I never changed my business practices. I was in a massive amount of credit card debt when I was in between jobs which is why I decided to take this gig on. Am I right in stating that the only difference in hobby vs. business is that you can't claim a loss as a hobby but you can break even? Also I know this is the very question you wanted to avoid answering, but would my case be considered a hobby?


"Am I right in stating that the only difference in hobby vs. business is that you can't claim a loss as a hobby but you can break even?" Yes. With a hobby you can't use the deductions past the break even point to offset any other income. 
"Am I right in stating that the only difference in hobby vs. business is that you can't claim a loss as a hobby but you can break even?" I would need more info about your situation. How long have you been ubering with loses? Did you expect to make a profit when you started? Are you gonna keep ubering? etc.... Sorry for the avoidance.


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## Emerald43

I have been ubering since the end of May up until about last week, so about 6 months. Just on Friday and Saturday nights so about 18 hours a month. I guess I expected to make a profit, at the same time I knew about depreciation and gas costs and what not. I probably will not keep ubering. Kind of goes to the last question. I knew the costs associated with it would not make it profitable in the long run with the way the rates are in Houston. I might just do it here or there whenever I am bored, unless Houston decides to pass this property tax assessment.


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## UberTaxPro

Emerald43 said:


> I have been ubering since the end of May up until about last week, so about 6 months. Just on Friday and Saturday nights so about 18 hours a month. I guess I expected to make a profit, at the same time I knew about depreciation and gas costs and what not. I probably will not keep ubering. Kind of goes to the last question. I knew the costs associated with it would not make it profitable in the long run with the way the rates are in Houston. I might just do it here or there whenever I am bored, unless Houston decides to pass this property tax assessment.


As long as you have records you don't have to worry about any "hobby tax" issues. If you end up with a loss you'll be able to use any extra deductions to offset other income you might have.


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