16 Uber Tax Deductions Drivers Can Use in 2023
According to Jeremiah Owyang of Crowd Companies and Vision Critical, there are 80 million sharers in the United States. That’s 27% of the population that should be taking advantage of tax deductions available to entrepreneurs and independent contractors.
A fraction of that 80 million, Uber and Lyft Drivers, have been getting the majority of the attention due to Uber’s rapid growth and controversy but none of the press has helped put more money into the pocket of the drivers.
As the author of The Lateral Freelancer, Saul of Hearts put it, “I had hoped to see more progress on worker protections and benefits by now. It’s leading me to turn toward old-school sharing options".
Many drivers share Saul’s sentiment. Fare cuts are hurting your take home pay, and none of us know what will happen as rideshare startups continue to evolve. But just because times are changing, it doesn’t mean that you have to let your pay continue to shrink! In fact, there are 16 ways in which you can actually make more money for yourself with just a little bit of extra effort on your Uber tax form.
Uber Driver Tax Deduction Stats
As an independent contractor, you’re responsible for your own taxes. This may not be fun but it allows you to take advantage of a number of tax deductions, which means more money in your pocket. Aside from business mileage, Uber drivers may be able to deduct part or all of their mobile data plan, passenger amenities, parking, tolls, or fees they incur while driving for Uber. Additionally, if drivers' business portion of actual vehicle expenses like fuel, repairs, maintenance, and lease/financing payments are greater than the mileage deduction, then drivers can claim the greater amount. Tracking both mileage and actual vehicle expenses during the year is a smart strategy to help maximize drivers' potential deductions.
When deciding on your deduction method, you can only choose between the Standard Mileage deduction method or Actual Expense method noted under “Tax Reference”, not both. In addition, you may also deduct Common Operating Expenses alongside one of those two deduction methods.
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Gig Economy Jobs Like Uber
As an independent contractor, driving for an on demand economy company gives you the ability make money with your extra time. Drive during your lunch break, at night, or during busy weekends – it’s up to you. However, these companies don’t only provide taxi-style services; companies like HopSkipDrive enable the driver to chauffeur kids to their activities around town, similar to a nanny. Other rideshare companies allow the individual to use their vehicle to make extra cash by renting it out or sharing a ride to work. If you have a car, then there’s an on demand economy opportunity out there for you.
Gig Economy Sites Like Airbnb
Make money off renting out your home, car, boat, tools, or almost anything with these sites like Airbnb. If you are out of town, make money while you are away. If you have free space in a home you live in, you can leverage that too. You can also choose specifically who you would like to rent to – say, a college sports fan. Check these hosting companies out below.
Gig Economy Delivery Jobs Like Postmates
Delivery jobs vary in their specific functions, but they all allow independent contractors like yourself to travel, create a flexible schedule, and deliver goods (as opposed to passengers). Jobs like Postmates give you the ability to work short gigs during times like your lunch break or at night, while others like Roadie allow you to use space in your car for somewhere you are already going to deliver a package.
Unskilled On Demand Jobs
If you’re looking to help someone out and make some quick cash, then this section is for you. These companies function as automatic lead generators: instead of finding gigs by yourself, these companies give you the gigs. If you enjoy working with people and assisting them with their problems, many of the companies listed allow you to do just that.
Gig Economy Jobs for Freelancers
Freelancing allows individuals to work wherever they want, whenever they want, with whoever they want. Freelance occupations range from bloggers, lawyers, chefs, stylists, caregivers, techies, and many more. If you like the freedom to travel and be your own boss, check out the companies below.
Rideshare Companies With Jobs Like Uber
As an independent contractor, driving for an on demand economy company gives you the ability make money with your extra time. Drive during your lunch break, at night, or during busy weekends – it’s up to you. However, these companies don’t only provide taxi-style services; companies like HopSkipDrive enable the driver to chauffeur kids to their activities around town, similar to a nanny. Other rideshare companies allow the individual to use their vehicle to make extra cash by renting it out or sharing a ride to work. If you have a car, then there’s an on demand economy opportunity out there for you.
Sites Like Airbnb
Make money off renting out your home, car, boat, tools, or almost anything with these sites like Airbnb. If you are out of town, make money while you are away. If you have free space in a home you live in, you can leverage that too. You can also choose specifically who you would like to rent to – say, a college sports fan. Check these hosting companies out below.
Delivery Jobs Like Postmates
Delivery jobs vary in their specific functions, but they all allow independent contractors like yourself to travel, create a flexible schedule, and deliver goods (as opposed to passengers). Jobs like Postmates give you the ability to work short gigs during times like your lunch break or at night, while others like Roadie allow you to use space in your car for somewhere you are already going to deliver a package.
Unskilled On Demand Jobs
If you’re looking to help someone out and make some quick cash, then this section is for you. These companies function as automatic lead generators: instead of finding gigs by yourself, these companies give you the gigs. If you enjoy working with people and assisting them with their problems, many of the companies listed allow you to do just that.
Freelance On Demand Jobs
Freelancing allows individuals to work wherever they want, whenever they want, with whoever they want. Freelance occupations range from bloggers, lawyers, chefs, stylits, caregivers, techies, and many more. If you like the freedom to travel and be your own boss, check out the companies below.
TAX REFERENCE
1. Standard Mileage: When filing taxes you have a choice between two deduction methods: Standard Mileage or Actual Expenses, not both. The Standard Mileage deduction allows you to deduct 54.5 cents per mile (2018) up from 53.5 cents per mile for 2017.
2. Actual Expenses: As an Uber driver, you have the option to deduct your actual vehicle expenses instead of Standard Mileage (not both). To use the actual expense method, keep track of what you spend during the year to operate your vehicle, including gas, tires, insurance, license, registration and repairs, to name a few, and then deduct the percentage directly related to your Uber driving. The Actual Expenses deduction method allows you to depreciate your vehicle and deduct most of your vehicle related expenses by the percentage of business use, but requires more expense tracking.
3. Common Operating Expenses: In addition to using the Standard Mileage or Actual Expenses deduction method, all the money you spend that is directly related to your driving business can be deducted when it comes time to file your taxes. From the cost of your mobile phone to car washes, you can deduct a number of operating expenses when it comes to tax time as long as they are considered “ordinary and necessary". The IRS defines “ordinary and necessary” as the following: “An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary". This may sound complicated, but we’ll break the individual deductions down for you now, so you don’t have to untangle the terminology on your own.
Curious about other gigs you can work to make more money? Check out our list of 100 on-demand gigs.
