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Now that I’m doing Uber as a side job. I’m trying to stay prepared for next tax season. What do I need to track? What should I expect come tax season?

3 Replies
Level 15

Now that I’m doing Uber as a side job. I’m trying to stay prepared for next tax season. What do I need to track? What should I expect come tax season?

Some general info.  You will need to keep good records.  You may get a 1099Misc or 1099K at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small.  You might want to use Quicken or QuickBooks to keep tract of your income and expenses.  There is one called QBSE QuickBooks Self Employed that works with Turbo Tax and will give you a free online tax return next year.

QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed  return

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax. You will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 57.  The SE tax is in addition to your regular income tax on the net profit.

Here is some IRS reading material……

IRS information on Self Employment   

Pulication 334, Tax Guide for Small Business  

Publication 535 Business Expenses

The first year you don't need to pay estimates as long as you pay in (by withholding) as much as your tax was last year.  But if you will have a big income you should send in estimates so you don't owe too much next April on your tax return.

You must make quarterly estimated tax payments for the current tax year if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
- 2. You expect your withholding and credits to be less than the smaller of:
    90% of the tax to be shown on your current year’s tax return, or
  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

To prepare estimates for next year you start with your current return, but be careful not to change anything in your real return or you will overwrite your return.
You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

Or Go to….
Federal Taxes
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button
Level 15

Now that I’m doing Uber as a side job. I’m trying to stay prepared for next tax season. What do I need to track? What should I expect come tax season?

Tax Tips for Uber, Lyft, Sidecar and other Car Sharing Drivers FAQ
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Where to enter Uber, Lyft and other driving income
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Intuit Alumni

Now that I’m doing Uber as a side job. I’m trying to stay prepared for next tax season. What do I need to track? What should I expect come tax season?

You should get a 1099-K from Uber but you could also keep track of your income on your own should you choose.

Keep track of every expense you had to produce the income and keep receipts.

When you drive for Uber, you are regarded as an independent contractor, not an employee. This means that at the end of the year, you will receive a 1099 form rather than the typical W-2 you may be used to getting.

According to the IRS, as an independent contractor, you are considered as a self-employed individual operating your own business. The IRS refers to this as conducting business as a sole proprietorship. Additionally, all driving services income you earn, whether through Uber or not, also fall under this same business.

In TurboTax, we don’t create a separate entry for your 1099-K info. That's because your 1099-K income should already be included in other income such as a 1099-MISC

However, if you don't have a 1099-MISC, report your 1099-K by following these steps before you enter any expenses:

·         Click on Federal Taxes on the top row of TurboTax Deluxe Online.

·         Click Wages & Income

·         Under All Income, click Show all income

·         Scroll to Self-Employment, click Start

·         Click Yes to Did you have any self-employment income or expenses?

·         Enter any income from sales or services that weren't reported on Forms 1099-MISC

(See the attached screenshot below. Click to enlarge.)

On the next screen, it will ask if you had expenses. Say "Yes"

One thing Uber drivers need to be aware of is that the 1099-K (and 1099-MISC) you receive shows the total amount that Uber collected for your rides; it does not have their fees, commissions, safe rider fees or phone rental payments taken out. You need to deduct those as part of your business expenses along with the mileage you drove. If you didn't keep track of the mileage or the amounts Uber withheld (commissions, etc.)  look on the 2016 Tax Information link on the payments page of your Uber driver account. There is a summary sheet linked at the bottom and it shows the fees they took out as well as the mileage for the trips (your mileage may actually be more as you drove around waiting for a hit)

The Uber fees deducted from your pay will go under "Other Common Business Expenses" then "Commissions & Fees"  section. (See the attached screenshot below. Click to enlarge.)

If you purchased additional insurance specifically because you started driving for Uber, you can deduct the amount of additional cost to you under Insurance.

Here are some more expenses, in addition to your mileage, that may help boost that difference for Uber/Lyft drivers:

·         Snacks and refreshments for passengers

·         Extra USB chargers

·         Power cables

·         Mobile routers for internet connection.

If you open a business bank account or credit card, the fees and interest are deductible.

The cost of TurboTax Self-Employed along with legal fees related to starting or running your business.

Some others include:

·         Car inspection fees, if required

·         Additional insurance (such as liability insurance)

·         PayPal fees

·         Dash cam (only if it is legal in your area).

Here's another link with some great info that you may find helpful:

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