Tax Tips for Uber Driver-Partners: Understanding Your Taxes

Also, if you drive for multiple services, you’ll be able to input multiple 1099s. It can also handle all of your personal, property and investment-related taxes. The largest tax deduction for most Uber drivers is the business use of a car. You can deduct the actual expenses of operating the vehicle or you can typically use the standard IRS mileage deduction. Drivers for these companies are usually independent contractors, a fact that has tax implications, both at filing time and year-round. Just by navigating to the “tax information” area of the Uber account and heeding the instructions, you will receive the lowest price for which you qualify.

A helpful tax summary

You’re probably accustomed to receiving a W-2 from your employer to document your earnings. If you have a “day job” as an employee in addition to your ridesharing gig, you should receive a W-2 from your employer and file it with your tax return as usual. Whether it’s your full time job, part-time gig, or an occasional source of side income, the rules around taxes for rideshare income are quite specific. Whether you want an expert to do your taxes from start to finish, or expert help while you file on your own, TurboTax has expert-backed offerings to meet your needs.

Deductions for mileage and the business use of your car

You’re allowed to deduct only the expenses that apply to the business use of your car. The IRS can disallow any business expenses you can’t support with mileage logs, receipts, or other documentation. The IRS planned to implement changes to the 1099-K reporting requirement for the 2023 tax year. Maryland, Massachusetts, Vermont, Virginia and the District of Columbia have a $600 threshold for requiring 1099-K in effect for 2023. North Carolina and Montana also have a $600 threshold, although state tax officials have said these states may offer relief.

Keep Track of Your Expenses

Even if you don’t receive the 1099-K, you’ll likely still have to file taxes. It includes a breakdown of the number of rides you’ve given, your gross earnings from rides, non-ride earnings , tolls, and mileage info. Just be sure to file your return turbotax uber discount by midnight on March 31, 2021 to take advantage of this offer. If you’ve ever used TurboTax, then the ‘Self-Employed’ version is very similar, but it can also handle all of the business-related deductions that you will want to take from driving.

Even if you’ve reported self-employment income before, ridesharing is a bit different than other businesses, offering unique challenges and opportunities. If you go through your Uber account it will automatically get you started with the Self-Employed edition. This is the best version of their software because it has all of the tools you need including special tax deductions for rideshare drivers.

As a rideshare driver, you won’t receive a W-2 from Uber or Lyft because you work as an independent contractor. In tax year 2020, the IRS reintroduced Form 1099-NEC for reporting independent contractor income, otherwise known as nonemployee compensation. This article covers the 1099-MISC instructions to help you navigate this updated form. Intuit’s bread and butter is making complicated things simple to understand.

All information on this site is provided for educational purposes only and does not constitute legal or tax advice. If you use the same vehicle for both your ridesharing business and your personal transportation, you must keep accurate records to separate the two uses. You’re allowed to deduct only the expenses that apply to the business use of your car. The IRS can disallow any business expenses you can’t support with mileage logs, receipts, or other documentation. The Uber tax summary of total online miles includes all the miles you drove waiting for a trip, en-route to a rider, and on a trip. When you subtract your business expenses from your income, you will enter the difference—known as the business income or loss—on line 3 of Schedule 1 for Form 1040.

Once it did its scan, I was able to figure out how much I spent on my car for all of 2016 in about 30 minutes . If you didn’t keep any records than it may take a while to sort through every transaction, but it is worth doing to get higher deductions. I asked the agent what “miles” constitute deductible miles for an Uber driver, and they explained that as long as I was available to accept a ride, I could deduct my miles . This was a good answer, although it could have been a little more specific around miles between rides or when logged out of the app and re-positioning .

If you’re not satisfied, return it within 60 days of shipment with your dated receipt for a full refund (excluding shipping & handling). Form 1099-K reports the total amount your passengers paid for the rides you provided. This includes all the money you collected from passengers, including the Uber commission and other fees. As a result, the amount shown on Box 1a of the form is greater than the amount you actually received.

Drivers who earned at least $600 from non-driving activities in the past year. Even if you don’t receive the 1099-NEC, you’ll likely still have to file taxes. Drivers who earned at least $20k and had 200 total transactions from passengers in the past year.

Uber will also keep track of certain expenses and list them on your 1099 for you, such as commission fees, tolls, sales tax, and other fees. If these solutions do not work for you, reach out to Uber or TurboTax customer service to explain the situation. If you begin your return in a TurboTax program accessed outside of your Uber Driver account, you will be unable to take advantage of this free program. If you do not already have a customer service code, you should not need one, and you can ignore this box at check out. If you access TurboTax from your Uber Driver account, you will not need to submit an Uber service code unless Uber Customer Service reaches out to tell you otherwise.

You’ll report the income you earn as a rideshare driver on Schedule C, Profit or Loss from Business, which you’ll file along with Form 1040. It should be noted that Uber does not give tax filing advice, and that TurboTax is the source of any tips ultimately provided to participants. TurboTax can also provide assistance in how to make the most of available operational expense deductions for Uber drivers. Qualifying drivers may be able to secure the Self-Employed version of its software for free. In order to verify your own eligibility, log into your account and, again, hit the TurboTax link. Uber Turbotax Free can offer you many choices to save money thanks to10 active results.

Their support allows us to spend time researching and building articles around rideshare expenses, taxes,how to deduct your miles, and monitoring the hidden costs of driving. I’ve also personally used TurboTax since I was 18, Harry uses Quickbooks to run his books and it’s a product that we both stand behind. To get you off to a good start with your business tax deductions, Uber provides you with a tax summary that breaks down the totals of both your 1099-K and 1099-NEC. You will most likely report the income from your 1099s on Schedule C, Profit or Loss from Business. Since Uber reports this income information directly to the IRS, you don’t have to include the actual 1099 forms with your tax return.

Yet it was still accurate and they seemed to understand the nature of our business better than I expected. Uber also provides its drivers with a third document, known as a tax summary. It’s simply a form that shows your 1099-MISC, 1099-K and 1099-NEC incomes on one page. It also shows selected expenses you can likely deduct on your Schedule C.

This year whenever I click on it it takes me back to the info page about Uber pro and then nothing. I’m thinking it might be because I’ve been in active the last couple months. If you’re using the TurboTax CD/Download software or can’t sign into your TurboTax account, click here to contact us. At the end of the day, our readers come first and your trust is very important to us. We will always share our sincere opinions, and we are selective when choosing which companies to partner with.

If you don’t receive a 1099-K, the IRS still expects you will report all your income, regardless of the amount. Unfortunately, personal grooming expenses, like a haircut, and clothing are not tax deductible. Personal grooming is never tax-deductible and rideshare companies do not require a uniform, so you can’t claim work clothes as an expense. The 1099-K you receive from Uber includes all fees customers paid for any drives you accepted. This is your gross income, but Uber sends a tax summary showing the exact amount of the direct deposits you received, which is what you’ll claim. You can easily import things like income, expenses, depreciation, and more while receiving step-by-step guidance for a maximum refund.

First, ensure that you access TurboTax through your driver dashboard in your Uber Driver account, not through a traditional TurboTax program. Keep reading to learn more about available Uber TurboTax discounts and special offers for all Uber drivers. This complimentary TurboTax program is a TurboTax special offer for this tax year (2021) and may not apply to past or future years for all Uber drivers. Luckily, Uber and TurboTax have a partnership to help you file your taxes without breaking a sweat. Since 2012, Brett Helling has built expertise in the rideshare and delivery sectors, working with major platforms like Uber, Lyft, and DoorDash. This subreddit provides a place for Uber drivers to discuss their experiences and for riders to ask about what it’s like to drive for Uber.

As far as we can tell, there will be no way to undo this action, so be careful to open TurboTax from your driver dashboard from the beginning. Drivers will qualify for a free TurboTax for the 2021 tax year through a special offer from TurboTax. Uber Drivers should receive a minimum of a $20 discount on TurboTax Self Employed. As an independent contractor, you technically work for yourself, not for Uber.

With TurboTax Live Assisted, our tax experts help you complete your taxes, fix any mistakes, and explain what’s next. Or, with TurboTax Live Full Service, a local tax expert matched to your unique situation will get your taxes done 100% right – as soon as today. Whichever plan you choose, you’ll get you taxes done with 100% accuracy and your maximum refund, guaranteed. It’s up to you to take care of federal and state income taxes, as well as Social Security and Medicare. Even if you don’t make enough to receive a 1099-K from a third-party provider or a 1099-NEC for income earned as a freelancer or contractor, you still need to report your income on your taxes. Per the IRS, This means that for tax year 2022 the existing 1099-K reporting threshold of $20,000 in payments from over 200 transactions will remain in effect.

You can also use QuickBooks Self-Employed to track your income, expenses, and mileage year-round and then easily export the information to your TurboTax Self-Employed tax return. H&R Block has tax filing offices nationwide, but you can probably spend less by filing taxes online or downloading their software program. As a rideshare driver, you’ll want to use their Premium Online tax filing service for $60 or Premium & Business service for $71.20. Rideshare companies are required to send 1099-NECs and 1099-MISCs to drivers who made $600 or more from driving or referrals and other income. Uber, however, typically provides these documents to all of its driver-partners regardless of the amount income to remind them about reporting their income and to help make filing their taxes easier. Whether you receive 1099s or not, you’re required to report and pay taxes on all the income you receive from your ridesharing service.

  1. The largest tax deduction for most Uber drivers is the business use of a car.
  2. You can also use QuickBooks Self-Employed to track your income, expenses, and mileage year-round and then easily export the information to your TurboTax Self-Employed tax return.
  3. This article covers the 1099-MISC instructions to help you navigate this updated form.
  4. So if you drive for Uber or Lyft or deliver for Postmates or DoorDash, this is the product you may want to use.
  5. We recommend keeping a log (physical or digital) to record your business expenses and store your receipts throughout the year.

You must calculate the portion of each expense that was for your business and deduct only that amount on your Schedule C. Now that you know the details, it’s time to take advantage of the Uber TurboTax partnership this tax season. You will also want to make sure that you keep your business and personal mileage separate to avoid any issues with the IRS. TurboTax will help you with this process by asking you simple questions to determine which deductions apply to you.

The Get It Back Campaign helps eligible workers claim tax credits and use free tax filing assistance to maximize tax time. A project of the Center on Budget and Policy Priorities, the Campaign partners with community organizations, businesses, government agencies, and financial institutions to conduct outreach nationally. For 30 years, these partnerships have connected lower and moderate-income workers to tax benefits like the Earned Income Tax Credit , the Child Tax Credit , and Volunteer Income Tax Assistance .

Generally, using a CPA to file your taxes can run you anywhere from $250 to $400, depending on your situation, so it’s one of the more expensive options. The benefit of having a CPA is knowing that you can go back to the same person year after year, and they’ll keep track of all your information. You can ask questions whenever you want and receive reminders to make quarterly estimated tax payments. Knowing how to file taxes as a rideshare driver is important because you’ll complete more than the standard 1040. You’ll need Schedule C to report your self-employment income and Schedule SE to determine the self-employment taxes owed. Since Uber reports this income information directly to the IRS, you don’t have to include the actual 1099 forms with your tax return.

Keep reading to find out how to use TurboTax to file easily and save more. Driving for Uber is an excellent source of supplementary income but is also challenging for new drivers. He acquired in 2014, the first ridesharing marketplace, leveraging his direct experience to enhance the site. Normally I take advantage of the TurboTax discount every year when I file.

We are not financial advisors and we recommend you consult with a financial professional before making any serious financial decisions. Just like TurboTax, H&R Block offers a maximum refund guarantee and a 100% accuracy guarantee. Hiring a CPA (certified public accountant) to file your taxes is one of the safest routes to take because accountants know the tax code, and some might even specialize in what you are looking for. Uber is not responsible for the products or services offered by third parties. If you earn self-employment income from a different type of business, such as Airbnb hosting services, you’ll need to file a separate Schedule C for that business. The same is true if you earn income as a wedding singer, yoga teacher, or anything else.

You can file your taxes yourself, use tax software such as TurboTax, or hire a tax professional to do them for you. Keeping track of your income yourself is vital to ensure you report it properly. Even if you don’t receive a 1099, you’re still required to report your ridesharing income to the IRS. All features, services, support, prices, offers, terms and conditions are subject to change without notice.

The rates, terms and fees presented are accurate at the time of publication, but these change often. We recommend verifying with the source to confirm the most up to date information. We work hard to share thorough research and our honest experience with products and brands. Of course, personal finance is personal so one person’s experience may differ from someone else’s, and estimates based on past performance do not guarantee future results.

It also might be the first time you’ve had to report self-employment income on your tax returns. Follow these tips to report your Uber driver income accurately and minimize your taxes. When you’re a driver for a ridesharing company,  you’re considered an independent contractor, not an employee, of the company. This means the company doesn’t withhold taxes from your income on your behalf and means you’ll need to report money you make from rideshare driving as self-employment income. As far as the rideshare company is concerned, you’re the owner of a separate business that it uses to provide driving services.

We expect the IRS to move forward with the over $600 reporting threshold for 2023 and the upcoming filing season unless Congress passes a law to change the requirement. Liberty Tax offers all the standard accuracy guarantees, support, and audit guidance, along with the ability to send your tax return to a local office for a free double-check. They have an advanced software system that is great for someone who’s been e-filing on their own for a year or two. While they don’t charge for Federal returns and also offer a 100% accuracy guarantee, the company charges $14.99 for state returns and other additional services they sell.