While keeping track of miles driven for each fare is necessary, that's not nearly enough documentation. When filing your tax return the following information has to be provided to the IRS.
- Odometer reading on Jan 1 of the tax year, or on the day you started using your car for business purposes, even if that use was less than 100% business use.
- Odometer reading on Dec 31 of the tax year, or on the last day you used your car in the business.
- Number of miles driven for business purposes (you have to prove this if audited)
- Number of miles driven for personal purposes (not dedutible, but reportable)
- Number of commuting miles driven (not deductible, but reportable)
Commuting miles driven are the miles from your residence to your primary place of employment, and back. In the case of an Uber driver, your commuting miles are the miles from your home to your first client, and from the drop off location of your last client, back to your home. These miles are not deductible.
Note that your business miles, personal miles and commuting miles "MUST" add up to the total miles driven for the year as determined by subtracting the Jan 1 odometer reading, from the Dec 31 Odometer reading.
