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When you are a Rideshare, Lyft or Uber driver, you are self employed.
- Enter your Name as the business name,
- Enter your address as the Business Address and,
- Click on NO when asked if you have an Employer Identification Number.
You are self-employed and have to set up your Rideshare, Lyft or Uber income as a business on Schedule C, Profit or Loss from Business.
As a Rideshare, Lyft, Uber, or other self-employed driver, here are some of the work-related expenses you may be able to deduct:
- Cell phones, data plans, and cell phone accessories (chargers, cradles and mounts)
- Vehicle expenses or standard mileage
- Car wash, cleaning, and detailing
- Licenses, permits, emissions testing
- Customer refreshments (bottled water, mints, snacks, gum)
- Commissions paid or deducted from income (Uber and Lyft split fare)
- Miscellaneous fees (tolls, parking, roadside assistance, city and airport fees, etc.)
- These out-of-pocket expenses will offset (reduce) your earnings, lowering the amount of income you pay taxes on.
- As for the car itself, you can deduct fuel, maintenance, repairs, auto insurance, registration, lease payments, and depreciation. Many drivers opt to do this through the Standard Mileage Rate (54 cents per mile) because it's much simpler. However, you can deduct each expense individually with the alternative Actual Expenses method.
To enter your income and expenses NOT reported on form 1099-MISC or 1099-K Payment Card and Third Party Network Transactions:
- Type sch c in the search bar and click search.
- Click on Jump to sch c.
- This will take you to where you can enter additional income from your 1099-K.
- You may be asked some general questions about your business.
- On the First, let's confirm your business and address screen, scroll down to Business description.
- After you answer them, you’ll be taken to the Your Business screen where you can enter your 1099-K under Business Income.
- If you are entering income from a 1099-K, remember that it reports the gross amount of the transactions. It doesn't include any adjustments for credits, refunds, discounts, fees, etc.
- You would also access the Business Expenses entry screens on the Your XXX Business screen.
To enter your vehicle expenses, you would also access the Business Expenses, Business Vehicle Expenses entry screens on the Your XXX Business screen. NOTE: Enter the vehicle expenses using the Actual Method.
- Enter all the information in the on line interview, including the miles driven.
- On the You've Got a Standard Mileage Deduction of XXX screen, click on Yes, I'd like to see if my actual expenses give me a bigger deduction.
- You will be prompted to enter what you paid for your car and depreciation methods available.
- Continue with the on line interview until you complete the Business Vehicle entry screens.
Please note the following:
- The IRS Form 1099-K (and/or IRS Form 1099-MISC) does not have their fees, commissions, safe rider fees or phone rental payments taken out.
- If you didn't keep track of the mileage or the amounts Rideshare, Lyft, Uber, etc., withheld (commissions etc), look on the 2016 Tax Information link on the payments page of your driver account. There may be 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.)