The Best Tax Tips and Deductions for Uber Drivers 99

The Best Tax Tips and Deductions for Uber Drivers

The following article is a guest post.

When you’re an Uber driver, there’s a little more to it than just being available to give people rides. Yes, it’s a simple concept, and it’s a good way to make extra money, but you also have to think about certain financial elements.

For example, do you know how much Uber charges drivers in fees? What about when it’s tax time? How should you handle that?

As an Uber driver, there are important tax considerations to keep in mind to keep your liabilities low when it’s time to pay the IRS.

The following are some of the key things to know about taxes and deductions if you’re an Uber driver, or you’re a rideshare driver for another service.

Pay Quarterly Taxes.

Not only does the IRS require it, but it makes it easier when you’re a self-employed independent contractor to pay your taxes quarterly. Then, when the time comes you’ll pay your yearly income tax return. But if you’ve kept up with things on a quarterly basis, you might owe nothing, or even be entitled to a refund.

Along with the estimated quarterly taxes you pay, Uber will file the 1099-MISC or the 1099-K with the IRS, and if applicable, your state as well if you make more than $600 driving for them in the year.

Driving for Uber does qualify you as being self-employed, and it’s important to understand what this means because if you’re used to having your taxes withheld by your full-time employer, it can be a bit shocking to owe taxes.

Car Expenses.

The biggest deductions most rideshare drivers can take on their taxes relate to their car expenses. You can use a standard mileage rate which gives you a mileage deduction of 53.5 cents, per mile you drive for business purposes, or you can deduct actual expenses.

Actual expenses can include things like lease expenses if you lease your car, depreciation, gas, and repairs.

For a lot of Uber and rideshare drivers, it’s easier to stick with the standard mileage rate, because otherwise, you’re going to have to keep up with a lot of information.

You can track your miles using an old-fashioned notebook, or you could go with a mileage tracking app instead.

Other Business Expenses.

No one wants to pay more in taxes than they have to, so it’s important to be aware of some of the deductions that might be available to you as a rideshare driver. 

A big one is the cost of your cell phone, and it’s 100% deductible if you only use it for work.

Also, any extra insurance coverage you get for your business can be deducted, as can the cost of things you might purchase to provide to passengers. If you pay parking and tolls while you’re working, you can deduct those. And if you’re using your car for business and you’re paying interest on a car loan, a portion of that may be deductible as well.

Finally, the Uber fees and commissions you’re charged are deductible as well, as long as the company takes them directly from your compensation.

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What is Cryptocurrency and How Does it Work? 6

What is Cryptocurrency and How Does it Work?

Cryptocurrency is certainly one of the most exciting developments in either finance or technology this century—at least, that’s what you’ve probably been told. However, you might not be satisfied that you know enough about what cryptocurrency really is or how it works to start exploring the many opportunities it offers.

Fortunately, it’s relatively easy to become acquainted with the basics of cryptocurrency. You can get yourself off to an excellent start by checking out this article, which will put you in a position to begin investing in cryptocurrencies for yourself.

What is Cryptocurrency?

At the most basic level, cryptocurrency is simply money that exists exclusively in digital form. There are no physical bills or coins—just numbers representing sums.

That might not seem revolutionary to those of you who are used to the concept of internet banking, but cryptocurrency is more than just a form of money.

The key word here is “currency”—each crypto is a distinct currency in and of itself, akin to the dollar or the pound.

Cryptos are also unique in that the technology they are based on makes them extremely secure. Most cryptocurrencies use blockchain technology, which allows for the creation of a decentralized ledger in which to record transactions.

Instead of having all transaction records stored on a single server (or server bank), blockchain creates multiple copies of the ledger each time a new transaction occurs and distributes them to many individual devices linked to a global network.

As a result, it is effectively impossible to hack or fake transaction records that rely on blockchain technology, since they can always be verified by the copies.

Why are So Many People Investing in Cryptocurrencies?

Now that you know the answer to the question what is cryptocurrency, you probably want to know why so many people are excited about it.

The answer is simple: certain cryptocurrencies have risen dramatically over the past several years—sometimes literally overnight.

Bitcoin and Ethereum are two popular cryptocurrencies that have garnered significant media attention for exactly this reason. Ethereum notably saw a rise of 13,000% in just a year, creating unprecedented wealth for those lucky enough to be holding it at the time.

These success stories have inspired wave after wave of eager new investors, who take advantages of online currency conversion platforms like Uphold to create whole investment portfolios around different cryptocurrencies.

The Risks of Investing in Cryptocurrencies

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Before you run to change your savings into Bitcoin, you should be aware of the risks associated with cryptocurrencies. These risks stem from another crucial difference between cryptocurrency and many other assets: the value of cryptocurrency is based on nothing but the demand for it.

“Bitcoin has no underlying rate of return,” says Jack Bogle, the founder of Vanguard. “Bonds have an interest cupon, stocks have earnings and dividends. There is nothing to support Bitcoin except the hope that you will sell it to someone for more than you paid for it.”

Still, there’s plenty of reason to hope for that with the amount of attention cryptocurrencies are currently receiving. Just be advised that the cryptocurrency market can be as fickle as any of the investors in it.

Despite the risks, cryptocurrencies offer huge potential rewards to their early adopters. Use this guide answering what is cryptocurrency as a starting point to help you learn more about this exciting new technology, and make informed investment decisions that will support your future.

About The Author

Nick Rojas combines 20 years of experience working with and consulting for small to medium business and a passion for journalism to help readers grow. He writes about technology, marketing, and social media for the aspiring entrepreneur. When Nick is not sharing his expertise, he can be found spending time at the beach with his dog Presto.