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JhnLewsk1
New Member

Why am I not getting the standard mileage deduction for Uber and Lyft driving this year?

 
4 Replies
RayW7
Expert Alumni

Why am I not getting the standard mileage deduction for Uber and Lyft driving this year?

Note:

If you want to use the standard mileage rate method, you must do so in the first year you use your car for business.

In later years you can choose to switch back and forth between the methods from year to year without penalty. Each year, you’ll want to calculate your expenses both ways and then choose the method that yields the larger deduction and greater tax benefit to you.

 

Below you’ll find an easy-to-follow road map to choosing the best method for you, this year.

 

Two types of expenses

The IRS offers two ways of calculating the cost of using your vehicle in your business: 1. The Actual Expenses method or 2. Standard Mileage method. Each method has its advantages and disadvantages, and they often produce vastly different results. Each year, you’ll want to calculate your expenses both ways and then choose the method that yields the larger deduction and greater tax benefit to you.

 

Actual Expenses vs. Standard Mileage Method

If you drive for a company such as Uber, the business use of your car is probably your largest business expense. Taking this tax deduction is one of the best ways to reduce your taxable income and your tax burden.

 

This is doubly important because you have to pay two separate taxes on your ridesharing income—once for your income tax and once for your self-employment tax (the amount you contribute as a self-employed individual to Social Security and Medicare). Both taxes are based on the net profit of your business, which can be reduced by taking a deduction for the use of your car for your business.

The IRS offers two ways of calculating the cost of using your vehicle in your business:

  1. The Actual Expenses method or
  2. Standard Mileage method

Each method has its advantages and disadvantages, and they often produce vastly different results. Actual Expenses might produce a larger tax deduction one year, and the Standard Mileage might produce a larger deduction the next.

 

Each year, you’ll want to calculate your expenses both ways and then choose the method that yields the larger deduction and greater tax benefit to you.

Below you’ll find an easy-to-follow road map to choosing the best method for you, this year.

Two types of expenses

 

As a self-employed owner of a ridesharing business, you’ll report your business income as well as your business expenses on Schedule C. The chart below breaks your total business expenses into two main groups:

  1. Common operating expenses and
  2. Vehicle expenses

Keep Complete Records

As these examples show, the method you use to calculate the business use of your car can have a big impact on your total business expenses, your net income, and your tax burden. Keep complete records so you can calculate your deduction using both methods, and then choose the one that saves the most money for you.

Remember, with TurboTax, we’ll ask you simple questions and fill out all the right forms for you to maximize your tax deductions.

JhnLewsk1
New Member

Why am I not getting the standard mileage deduction for Uber and Lyft driving this year?

I wish that answered my question, but I’ve never claimed actual expenses for Uber and Lyft. I’ve always opted for the standard mileage deduction, this is the first time it’s given me an issue.

WendyN2
Level 7

Why am I not getting the standard mileage deduction for Uber and Lyft driving this year?

Here is a link to an excellent "how to" specifically relating to Uber and Lyft:

 

 

Mileage Deduction Rules for Uber and Lyft Drivers

 

dgillotte13
New Member

Why am I not getting the standard mileage deduction for Uber and Lyft driving this year?

I had the same problem. 3 different times I have been on the phone with support and they view my screen. They have seen the problem and reported it. A question is supposed to come up after you enter your mileage but it doesn’t always. It is also supposed to show your previous year vehicle and it doesn’t. When I re entered my vehicle info it ended up having my 2019 vehicle and my 2020 which are both the same in my Schedule C. I was prompted to add all my vehicle deductions again and it ended up doubling everything with no way to delete. I am hoping they fix this known glitch so I can get my free state return if I file by 2/15. I have cancelled and redone my return 3 times hoping it will correct since there is no way to delete info from schedule c and you cannot edit your vehicle info once entered. Also won’t let you trash vehicle info as they verified on my screen.

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