Tax Tips for Self-Employed Rideshare & Delivery Drivers:
Remember, you are not an employee of Uber, UberEats, VIA, Postmates, or Lyft when you work as a rideshare or delivery driver. You are self-employed. What does that mean for your taxes?
Each “pay out” or “paycheck” you receive is untaxed. So you have to make sure to pay for federal and state income taxes. Don’t forget Social Security and Medicare, too. Sometimes, those taxes can add up to anywhere from 30% to 50% of your income, so paying them on time and accurately is important. Also, saving money towards these taxes will help you in the long-run.
You will report income and expenses on Schedule C and Schedule SE.
- Deduct the expenses of operating the car for business use. This includes gas, oil, repairs, insurance, maintenance, depreciation, and lease payments.
- Alternatively, you can take the standard IRS mileage deduction. The rate is 54.5 cents per mile driven for business use.
Your CPA can advise you on which will be most cost-effective.
- It will be useful to keep track of receipts, mileage logs, and any other documents that helps prove your business use versus personal use of the vehicle.
- You can deduct things you provide your riders such as water, gum, or snacks. In addition, any parking or tolls fees that you incurred can be deducted as well.
- If you have a separate phone or tablet for driving, you can deduct the expenses for that also.
Lastly, you most like received a copy of at least one Form 1099 either via mail or downloadable online. As your tax experts, we can help you understand the payment reports.
If you found this helpful, send us a reply and we’d be happy to offer you a free consultation. If this doesn’t apply to you but does to someone else, share this information with them!
Ahad&Co specializes in a number of industries including the rideshare and TLC drivers. Utilize our expertise and save the most money on your annual taxes.