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Level 1

What percentage of the total business deductions am I allowed to deduct against the Gross Profit each quarter to determine the amount I will pay SECA taxes on?

I am a Rideshare Independent Contractor and filed using all the appropriate forms (Sched C and SE Tax Worksheet, etc) via TurboTax Self-Employed but the amount of the business deductions I am allowed to take on my return were less than what I manually calculated.  Is that because I can only use a percentage of the total amount of business deductions allowed and not dollar-for-dollar?

Rather than using actual car expenses, I used the Standard Mileage Deduction for both on-trip and off-trip miles at $0.545/mi for 2018 the business usage of; my phone, iMusic Membership and supplies for passengers. (Wasn't sure if car washes and business usage of car insurance were included in the Standard Mileage Rate deduction)  It was the mileage deduction that kept coming out less, so that is why I ask.

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Level 1

What percentage of the total business deductions am I allowed to deduct against the Gross Profit each quarter to determine the amount I will pay SECA taxes on?

The business expenses you incurred for your phone, IMusic, supplies, etc., are deductions you may take in full to reduce net income subject to self-employment tax.  If you use your vehicle for part business and part personal, the Standard Mileage rate would only apply to your business mileage and that amount used to reduce income subject to self-employment tax.  Car washes, maintenance & repairs, gas, etc. would only be deductible if you chose actual expenses rather than the Standard Mileage rate.

Please comment if you need additional assistance with this.

1 Reply
Level 1

What percentage of the total business deductions am I allowed to deduct against the Gross Profit each quarter to determine the amount I will pay SECA taxes on?

The business expenses you incurred for your phone, IMusic, supplies, etc., are deductions you may take in full to reduce net income subject to self-employment tax.  If you use your vehicle for part business and part personal, the Standard Mileage rate would only apply to your business mileage and that amount used to reduce income subject to self-employment tax.  Car washes, maintenance & repairs, gas, etc. would only be deductible if you chose actual expenses rather than the Standard Mileage rate.

Please comment if you need additional assistance with this.