UBER Driver: Could I deduct the rented car expenses using standard mileage

[nediaz1976]

Hi 

I was doing UBER/LYFT for 9 months as I don't have car I rented paying 350.00 by week.

Could I deduct the rent expenses using Standard Mileage?

Where should I put it in the schedule C

Regards

[MarilynG]

You can deduct either Actual Expenses for your car used for business, or Standard Mileage.  If this is your first year for your business, you can choose either method.

For Actual Expenses, you have to keep detailed receipts of what you spent on gas, oil, tires, insurance, loan interest, etc. and figure what % of these expenses are business-related.

For Standard Mileage, you just need to know number of Business Miles driven.  

Here's some helpful info:

https://turbotax.intuit.com/tax-tips/self-employment-taxes/standard-mileage-vs-actual-expenses-getti...

[Uan]

Not a tax expert, however here’s what I found and I believe it is correct. Standard mileage deduction includes the depreciation on the vehicle. Only one tax payer can claim the depreciation. With Uber car rental via Hertz (or some other firm), that company is the actual owner of the vehicle and they will be taking the depreciation. Also, auto insurance is also included in the standard mileage deduction, and again, Hertz (or other firms) would also be deducting that. To the best of my knowledge, with a rental vehicle, Uber drivers will need to itemize their expenses. 

[Carl]

You must own or lease the vehicle in order to use standard mileage rate. Says so in IRS Topic 510.

https://www.irs.gov/taxtopics/tc510 

Understand that renting from a company like Hertz, is not the same thing as leasing a vehicle from a local sales dealer.

[geoholt3]

If I rent a car from Uber through Hertz, can I deduct the cost of the rental, and take the mileage deduction at the same time? That's a huge expense renting a car for $300 a week. The mileage deduction is fine for covering your gas or charging expenses, but doesn't begin to help with gas, charging, and a rental. It sounds like we would be better off itemizing everything including the rental, verses just taking the standard mileage deduction?

[ErnieS0]

No. You cannot use the standard mileage deduction on a rental because you do not own the vehicle.

You can deduct the rental cost and actual expenses, such as petrol and charging expenses.

@geoholt3 

[geoholt3]

If I chose not to tell the IRS I was renting the car, (go with me here), what deduction would be greater, the mileage, or rental cost and petrol? Let's say $1500 month rental and petrol, verses 40,000 miles a year.

[PattiF]

The business mileage rate was  $58.5 cents a mile for the first half of the year, and $62.5 cents a mile for the second half of the year beginning on July 1.

But, as ErnieSO said above, standard mileage cannot be used for a rental car. Please see IRS Topic No. 510.

@geoholt3

[geoholt3]

How would the IRS know I was using a rental car? Does Hertz tell them?

[AnnetteB6]

To my knowledge, Hertz does not report rental information to the IRS.  

Just to make you aware, you are the one responsible for the information reported on your tax return when you use TurboTax and self-prepare your return.  The risk you take by not being completely truthful when preparing your return is that if your return is chosen by the IRS for an audit, then you will be asked to substantiate claims made on your return.  This could include your mileage records and records showing that you own the vehicle for which you claim the mileage.  If you cannot provide this information, then you will be subject to additional taxes and penalties which could include additional penalties based on filing a fraudulent return.  

@geoholt3 

[geoholt3]

Good point, thank you.

[KevinNg131]

I have another sceneries, where I owned the car and I have used standard mileage deduction for my vehicle, but during last year I also rent  Tesla from Hertz to drive for Uber. How can I deduct the renting cost, and charging cost as a business expense for the rental part of a business? Where do I claim this on Turbo Tax? Please advise.

[RobertB4444]

If you rented the car strictly for your business and then drove it 100% for work then you can deduct the total cost of the rental as a business expense (you can put it as a rental).

If you used it part time for work but also used it for personal driving then you need to divide up the time and you can take the deduction for the percentage of time that it  was business use.  For example, if you used it half of the time you drove it you can deduct half of the cost of renting it.

The other option is to deduct the mileage that you drove while you had the rental.  That may be the better deduction.

@KevinNg131 

[KevinNg131]

So for the rental cost, do I put that under Miscellaneous deduction and write as a car rental cost?

[RobertB4444]

I would put it as a rental expense but your way will do the same thing.

@KevinNg131