With the rise of the new sharing economy, many drivers are participating in ride sharing services with companies like Uber and Lyft. Here's a short video you can watch to make sure you're getting all of the tax benefits of being an Uber or Lyft driver.
Hello, I’m Adrienne from TurboTax with some helpful tax tips for drivers who work for companies like Uber or Lyft.
Tip number one: File taxes as a self-employed person.
Pending laws may change this, but until then, file taxes as if you are self-employed and use Schedule C to report your income and expenses.
Tip number two: Set aside a portion of your income to pay taxes, since they’re not taken out of your paycheck.
Tip three: Deduct your business expenses. The biggest deduction will likely be the cost of your car. If you use the car only for ride-sharing, you can take one hundred percent of the total miles driven or actual expenses incurred as deductions.
Tip four: You can also deduct other expenses like snacks you offer to passengers, tolls, maps, and more. You can even deduct the cost of your phone bill if you use it for business.
Tip five: Keep meticulous records, including mileage logs and receipts. The IRS will not allow deductions without documentation to back it up. Be sure to note for each expense the date, time, amount, and business nature.
Don’t worry about knowing which tax forms to fill out when you are self-employed, TurboTax Self-Employed will ask you simple questions about you and your business and give you the business deductions you deserve based on your answers. TurboTax Self-Employed uncovers industry-specific deductions. Some you may not even be aware of.