I assume you are considered an Independent Contractor with Uber and they issue you a 1099-MISC. Therefore, you are considered self-employed and are required to abide by the IRS regulations regarding self-employed. I'll provide you some details on the subject as well as some links to valuable information.
First let me answer your question about deductions.
The cost of the vehicle
can be deducted along with the incidental expenses of running the
vehicle. This includes the monthly note or lease payment, gasoline,
tires, oil and repairs. An automobile club card for emergency repairs
and the insurance policies on the taxi and to cover the riders are
deductible. So are the fees you pay the parking garage, the tolls you
pay while driving over bridges or on the road, parking lot fees and
parking meter fees. The fare machine is also deductible. Make sure to keep your receipts. The other car deduction option is to take a per mile deduction at a rate of 56 cents per mile, but you will have keep track of every mile driven, including starting and ending odometer on a daily basis, separating personal miles from business miles. Note; mileage getting to and from work is considered personal miles.
Business deductions
include fees to maintain the business, such as the vehicle registration,
business license and your commercial license. A dispatch service you
hire is also deductible as are the communication devices you use, such
as a radio or a cell phone. Other business deductions include the
computer and accounting software you may use to keep track of your
business expense, the file cabinet for the records and the lease, rental
payment or mortgage on the business location, if any. You may also
deduct a dedicated spot in your home where you handle business paperwork
providing you meet the criteria.
Insurance is deductible, but not health insurance unless it is required by Uber.
- Supplies are deductible, like cleaning supplies, special forms or equipment required to do your job, make sure to keep your receipts.
A tax credit differs
from a tax deduction in that the credit is subtracted from the total
taxable income. Tax credits you may be entitled to will vary. One tax
credit you may be eligible for as a self-employed taxi driver includes
the earned income credit. This is available if your earnings fall below
the monetary threshold and you meet the other requirements. Another tax
credit is the savers credit that allows a portion of retirement funds,
after the deduction, to be used as a credit provided the qualifications,
such as income, filing status and age are met.
Other deductions as a
self-employed taxi driver include your health insurance premiums and all
medical bills, such as the prescriptions, co-pay for the visit, medical
tests and hospital visits. Vision and dental health insurance with
their appointments, glasses, root canals or cleanings are deductible.
Marketing costs to promote your taxi are deductible, such as flyers
handed out during a concert or busy holiday and radio advertisements.
Conventions or trade show expenses are deductible as are the hotel rooms
and food expenses. Transaction Fees, if Uber charges you a credit card transaction fee or if it comes out of your check you can deduct these fees.
Memberships to trade organizations or associations, magazines, unions, or boards that represent your industry is deductible.
As a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly.
Self-employed individuals generally must
pay self-employment tax (SE tax) as well as income tax. SE tax is a
Social Security and Medicare tax primarily for individuals who work for
themselves. It is similar to the Social Security and Medicare taxes
withheld from the pay of most wage earners. In general, anytime the
wording "self-employment tax" is used, it only refers to Social Security
and Medicare taxes and not any other tax (like income tax).
Before you can determine if you are subject to self-employment tax
and income tax, you must figure your net profit or net loss from your
business. You do this by subtracting your business expenses from your
business income. If your expenses are less than your income, the
difference is net profit and becomes part of your income on page 1 of
Form 1040. If your expenses are more than your income, the difference is
a net loss. You usually can deduct your loss from gross income on page 1
of Form 1040. But in some situations your loss is limited. See Pub. 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) for more information.
You have to file an income tax return if your net earnings from
self-employment were $400 or more. If your net earnings from
self-employment were less than $400, you still have to file an income
tax return if you meet any other filing requirement listed in the Form 1040 instructions (PDF).
stimated tax is the method used to pay Social Security and Medicare
taxes and income tax, because you do not have an employer withholding
these taxes for you. Form 1040-ES, Estimated Tax for Individuals
(PDF), is used to figure these taxes. Form 1040-ES contains a worksheet
that is similar to Form 1040. You will need your prior year’s annual
tax return in order to fill out Form 1040-ES.
Use the worksheet found in Form 1040-ES, Estimated Tax for
Individuals to find out if you are required to file quarterly estimated
tax.
Form 1040-ES also contains blank vouchers you can use when you mail
your estimated tax payments or you may make your payments using the Electronic Federal Tax Payment System (EFTPS).
If this is your first year being self-employed, you will need to
estimate the amount of income you expect to earn for the year. If you
estimated your earnings too high, simply complete another Form 1040-ES
worksheet to re-figure your estimated tax for the next quarter. If you
estimated your earnings too low, again complete another Form 1040-ES
worksheet to recalculate your estimated taxes for the next quarter.
See the Estimated Taxes page for more information. The Self-Employment Tax page has more information on Social Security and Medicare taxes.
To file your annual tax return, you will need to use Schedule C (PDF) or Schedule C-EZ
(PDF) to report your income or loss from a business you operated or a
profession you practiced as a sole proprietor. Schedule C Instructions (PDF) may be helpful in filling out this form.
Small businesses and statutory employees with expenses of $5,000 or
less may be able to file Schedule C-EZ instead of Schedule C. To find
out if you can use Schedule C-EZ, see the instructions in the Schedule
C-EZ form.
In order to report your Social Security and Medicare taxes, you must file Schedule SE (Form 1040), Self-Employment Tax
(PDF). Use the income or loss calculated on Schedule C or Schedule C-EZ
to calculate the amount of Social Security and Medicare taxes you
should have paid during the year. The Instructions (PDF) for Schedule SE may be helpful in filing out the form.
f you made or received a payment as a small business or self-employed (individual), you are most likely required to file an
information return to the IRS.
Independent Contractor Defined:
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-DefinedSmall Business Taxes - The Virtual Workshop:
http://www.irsvideos.gov/SmallBusinessTaxpayer/virtualworkshopSelf Employed Individuals Tax Center:
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center
