You may not think you have a business, but the IRS considers you self-employed and have your own business.
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. You will be able to deduct expenses against the
income.
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
reported on form 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:
- Type sch c in the search bar and
click search.
- Click on Jump to sch c.
- At the Your XXX Business screen, scroll down to Business Expenses, Business Vehicle Expenses, click start or
update.
- 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.
Related information: How
does my work in the sharing economy (Uber, Airbnb, etc) affect my taxes?