16 Uber and Lyft Tax Deductions Drivers Can Use in 2017

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.

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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.

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. Here are 16 deductions Uber and Lyft drivers can use immediately.

Deduction #1
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Standard Mileage

Did you know your Uber Driver statements only show you a fraction of your deductible miles?

Did you know your Uber Driver statements only show you a fraction of your deductible miles? From the moment you leave your driveway or parking spot to start driving for Uber (in search of your first passenger), until you drop off your last passenger and return home, your total business miles are deductible, including the many more miles you drive in search of your next passenger. That’s why it’s important to count every mile so you can save (or earn) more money. Now, obviously if you squeezed in a personal errand or two, those miles don’t count, but you get the picture.

There’s a lot of confusion among Uber drivers about what the current mileage rate is. The IRS’s published business mileage rate for 2017 is $0.535 per business miles driven. The rate fluctuates each year based on market conditions and other factors.

When filing taxes, you have a choice between two deduction methods: Standard Mileage or Actual Expenses, not both. The Standard Mileage deduction method is the easiest, but may not give you the largest deduction. The Actual Auto 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 detailed expense tracking.

For example

Let’s say Gina Gogetter, a Washington, D.C.-based Sidecar driver, drove 4,000 miles last year for her business, which can be deducted at a rate of $0.535/mile in 2017. Gina could knock $2,140 off of her taxable income by taking the mileage deduction. Depending on her effective tax rate, Gina could save a pretty significant sum of money! This is why it’s important to take a mileage deduction, when possible.


Where to take the deduction

Line 44 of the IRS Schedule C Form 1040 gives you the option to enter the number of miles you used your vehicle for a. Business b. Commuting c. Other
Make sure to enter all of your business mileage on line 44a.

standard mileage deduction

Schedule C (Form 1040) line 44

Tax Reference: Standard Mileage


Deduction #2
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Car Payment

Even if you lease, and don’t own your car, you can deduct a portion of the lease payment proportional to the business use of your vehicle.

Even if you lease, and don’t own your car, you can deduct a portion of the lease payment proportional to the business use of your vehicle.

For example

Sally uses her car 75% of the time for driving for Uber, so she can deduct 75% of her lease payment.

Deduction Category

Schedule C (Form 1040) line 20a.

car payment deduction

Tax Reference: Actual Expenses

Deduction #3
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Depreciation (Owned)

If you own your business vehicle, you can deduct the cost/value of your car over a 5 year period through depreciation. There are a few different ways …

If you own your business vehicle, you can deduct the cost/value of your car over a 5 year period through depreciation. There are a few different ways you can depreciate your vehicle. The main difference is in how you spread the depreciation expense out over a five year period. Here are your options:

  • The Modified Accelerated Cost Recovery System (MACRS): This method is a hybrid of multiple depreciation methods. Typically, it is the method the IRS has you default to using.
  • Straight Line: Equal expensing each year, so if you spent $30,000 on your car, divided evenly over 5 years, you would get a $6000 deduction per year). *Required if you switch from standard mileage to actual.
  • The 200% declining balance method: You record more depreciation at the beginning of the five year period; then you switch to straight line when that method provides an equal or greater deduction.
  • The 150% declining balance method: You record more depreciation at the beginning of the five year period (not quite as much as 200% method); then you switch to straight line when that method provides an equal or greater deduction.

For example

Carmen buys a new work car for $20,000 in 2017 and uses it 75% of the time for her Lyft business. Her depreciable basis is $15,000 ($20,000 cost x 75% business use). Using the accelerated depreciation method, her depreciation deduction for 2017 would be $3,000 (20% x $15,000).

Because her vehicle is a passenger vehicle and she uses it for personal use 25% of the time, her total deduction for 2017 is limited to $2,250 (75% business use x $3,000).

Deduction Category

Schedule C (Form 1040) line 13.

depreciation deduction

Tax Reference: Actual Expenses


Deduction #4
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Interest on Auto Loan (Owned)

Since you are self-employed and your car is a crucial part of your business, you can deduct that part of the interest expense that represents your …

Since you are self-employed and your car is a crucial part of your business, you can deduct that part of the interest expense that represents your business use of the car.

For example

If Clark uses his car 60% for business, he can deduct 60% of the interest. However, he cannot deduct the part of the interest expense that represents his personal use of the car.

Deduction Category

Schedule C (Form 1040) line 16b.

interest on auto loan deduction

Tax Reference: Actual Expenses

Deduction #5
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License, Title and Registration

Did you know that you can also deduct some portion of your vehicle registration fees? It’s critical to know that this particular deduction varies from state…

Did you know that you can also deduct some portion of your vehicle registration fees? It’s critical to know that this particular deduction varies from state to state, so some due diligence on your part is required here.

There are a few requirements that your state of residence must meet in order for you to deduct your registration fees:

Your state must base its registration fee (or at least partly base it) on vehicle value, as opposed to weight (i.e., the cost must be in the form of a personal property tax, not an excise tax.).
Your state must charge the tax annually, even if you pay it more or less often, and you must have paid the tax during the current tax year.

For example

Anthony’s annual car registration fee is based on a formula that charges $2 per 100 pounds of vehicle weight, $1 per $1,000 of value, a flat $10 for license plate tabs, and $35 in other taxes and charges. If he had a 4,200-pound car with a value of $25,000, then his fee would be $154 ($84 + $25 + $10 + $35). Of that total, only $25 would be deductible, since that’s the only portion based on the actual value of his car.

Deduction Category

Itemize all deductions on Form 1040, Schedule A (Itemized Deductions).
Include the used vehicle’s registration fee (or the part of the fee based on value) on Line 7 of Schedule A.

Tax Reference: Actual Expenses


Deduction #6
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Gas

You can deduct your gas costs as long as it’s business related. This means that you can deduct gas costs that you incur while picking up customers…

You can deduct your gas costs as long as it’s business related. This means that you can deduct gas costs that you incur while picking up customers and driving them to their destinations, or driving to meetings with potential Uber drivers that you’re trying to recruit.

For example

Donny uses his car 60% of the time for driving for Uber and 40% for personal use. That means he can deduct exactly 60% of his gas costs – and not a penny more!

If Donny spent $1500 on gas in 2017, he can deduct $900 (.6 x 1,500 = 900).

Deduction Category

Schedule C (Form 1040) Line 9.

gas deduction

Tax Reference: Actual Expenses

Deduction #7
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Maintenance

Since you are probably using your vehicle for a combination of business and personal use, you will be able to deduct a proportion of your maintenance…

Since you are probably using your vehicle for a combination of business and personal use, you will be able to deduct a proportion of your maintenance costs at tax time. This includes oil changes, tire rotations, inspecting and replacing brake pads, and anything else required to keep your car running smoothly.

For example

In 2017, Carlos had to buy 2 new rear tires, which cost him $300 to purchase and install. If he’s using his car 50% of the time for driving for Lyft, he can deduct $150 off of the total cost to replace the tires.

Deduction Category

Schedule C (Form 1040) Line 9.

maintenance deduction

Tax Reference: Actual Expenses


Deduction #8
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INSURANCE

Car insurance is just another critical cost of running your rideshare business – you can’t drive without it! Like other actual expense deductions..

Car insurance is just another critical cost of running your rideshare business – you can’t drive without it! Like other actual expense deductions, remember that you can only deduction the amount proportionate to your business usage.

For example

Gina’s monthly auto insurance payment is $135, or $1,620 per year. If Gina uses her car 30% of the time for driving for Uber, then she can deduct $486 on her tax return ( .3 x 1,620 = 486).

Deduction Category

Schedule C (Form 1040) Line 9.

car insurance deduction

Tax Reference: Actual Expenses

Deduction #9
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Mobile Phone and Charger(s)

As a Uber driver, your mobile phone is the control center of your business. That means that you can–and should– deduct its…

As an Uber driver, your mobile phone is the control center of your business. That means that you can–and should– deduct its full or partial cost when it comes time to file.That new smartphone you’ve purchased for work, it’s deductible. And so is your monthly plan. The only caveat is that if the phone was initially purchased for personal use, you can only take a deduction for the time you used it for work.

For example

If 50% of your data and minutes are used when driving, that portion is deductible.

If you purchased (or plan to purchase) a phone that’s completely dedicated to your work, then 100% of the cost of the phone and the monthly plan is deductible

Deduction Category

Schedule C (Form 1040) Line 22.

mobile phone deduction

Tax Reference: Common Operating Expenses


Deduction #10
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Wireless Plan

If all of your phone calls are business related, you can deduct the total amount of your cell phone bills, including any activation fees.

If all of your phone calls are business related, you can deduct the total amount of your cell phone bills, including any activation fees. However, if you’re like most people, and you use your phone for both business and personal use, then you will have to determine the deductible business usage percentage.

For example

To simplify her accounting, Angela has a separate cell phone she uses for just running her Lyft business. That way, she can write off all of her wireless bill when tax time rolls around and the full cost of the phone she purchased exclusively for business.

Deduction Category

Schedule C (Form 1040) Line 25.

mobile phone bill deduction

Tax Reference: Common Operating Expenses

Deduction #11
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Food and Drinks for Passengers

Did you know your Uber statements only show you a fraction of your deductible miles?

The IRS says that you can deduct business-related entertainment expenses you have for entertaining a client, customer, or employee. That includes the food and drinks you purchase for your passengers, as well as lunches with potential Uber drivers you are recruiting and networking with existing drivers. However, you can generally only deduct 50% of business-related food and drinks, so don’t go crazy buying tons of fancy kombucha and sparkling water, since you will only be reimbursed for half of it.

For example

Dominique likes to keep a cooler full of bottled water and soft drinks for her customers in her car. If she spent $500 on beverages in 2017, she will be able to deduct $250 of that.

Deduction Category

Schedule C (Form 1040) Line 24b.

entertainment deduction

Tax Reference: Common Operating Expenses


Deduction #12
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Car Washes

As a bed and breakfast needs to hire cleaners to keep its rooms nice and tidy, an Uber driver needs to provide car washes…

As a bed and breakfast needs to hire cleaners to keep its rooms nice and tidy, an Uber driver needs to provide car washes to keep his or her customers happy. Because car washes are considered part of your business’s “ordinary and necessary” operating expenses, you can deduct a portion of those expenses on your tax returns.

For example

In 2017, Paolo spent $40 to get his car professionally cleaned each month ($480 annually) and $150 on miscellaneous cleaning supplies, so his car was always clean for his passengers (and he could continue getting high ratings). Paolo can then deduct $630 in expenses related to washing his car for 2017.

Deduction Category

Schedule C (Form 1040) Line 9.

car wash deduction

Tax Reference: Common Operating Expenses

Deduction #13
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AAA membership

Did you get a AAA membership or other similar roadside assistance plan because of your driving business?

Did you get a AAA membership or other similar roadside assistance plan because of your driving business? If you got it for your driving business, and don’t use it during a personal trip, then you can deduct the entire amount.

For example

If Janet decided that it would benefit her driving

Deduction Category

Schedule C (Form 1040) Line 9.

aaa membership deduction

Tax Reference: Common Operating Expenses


Deduction #14
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Environmentally Friendly Vehicle Credits

There are tax incentives associated with purchasing certain electric and hybrid vehicles.

There are tax incentives associated with purchasing certain electric and hybrid vehicles. IRC 30D allows taxpayers who own qualifying vehicles acquired after December 31, 2009 to take a credit of $2,500 plus, $417 for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. However, note that the total amount of the credit allowed for a vehicle is limited to $7,500.

For example

There are just too many parameters here to give a common example — it’s as complicated as it seems. Reference the following documents for more information: FuelEconomy.gov, IRC 30D, IRC 30D Motor Vehicle Credit Quarterly Sales.

Tax Reference: Common Operating Expenses

Deduction #15
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Parking fees

The cost of parking fees incurred while working are deductible. These include garages and meters.

The cost of parking fees incurred while working are deductible. These include garages and meters.

For example

Each week, Sandra takes a trip to the grocery store to purchase food and drinks for her passengers. In order to do her shopping, she needs to pay the cost to park in the store’s parking garage. Because these food and drinks are considered operating expenses, she can write off the parking garage fees

Deduction Category

Schedule C (Form 1040) Line 9.

food and drink deduction

Tax Reference: Common Operating Expenses


Deduction #16
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Tolls

Like parking fees, the cost of tolls are also deductible. Just make sure you’re only deducting the cost of tolls you pass through while driving for Uber!

Like parking fees, the cost of tolls are also deductible. Just make sure you’re only deducting the cost of tolls you pass through while driving for Uber!

For example

Carmela uses the toll road for one round trip every day to transport her Uber passengers, spending $140 a month on tolls ($1680/year) – that’s a lot of money! However, she is not worried – she knows she can deduct 100% of these toll fees when tax time rolls around, since they are for business. The other $500 per year she spends on tolls for personal trips is not deductible.

Deduction Category

Schedule C (Form 1040) Line 9.

toll road deduction

Tax Reference: Common Operating Expenses

 

Tax Reference

  • 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 53.5 cents per mile (2017) down from 54 cents per mile for 2016.
  • 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.
  • 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.
Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.

Curious about other gigs you can work to make more money? Checkout our list of 100 on-demand gigs.

Make more money with Hurdlr by minimizing your taxes and increasing your pay. Hurdlr seamlessly tracks your true expenses, mileage, and deductions in real-time, on the go.

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  • sghanizada

    I’m curious to know if people have taken deductions outside of the ones listed here?

    • Mahiul Haque

      Why u need to save more money?

  • AustinUltimateSedans

    WHOA!!!! Unless you have an insurance plan which covers commercial use, your policy is VOID during commercial use, so claiming it as a tax deduction would be fraudulent!!!

    • sghanizada

      No doubt about it, every deduction has to apply directly to your business in order to be considered valid. For example, if you have Metromiles personal coverage insurance for Uber, that may not be deductible because the intention is to insure your vehicle before Ubers commercial policy kicks in.

      • AustinUltimateSedans

        But….isn’t the metro mile policy designed to cover the commercial “trolling” period? In that case, I would think it is a business expense.

    • Peter Johnston

      Are you a CPA? I bought my vehicle specifically to drive for uber and lyft, I would never own a car for personal use, and I did not for over 5 years prior to starting my business. Since we have to have a car, a phone with a data plan, and since and we have to have personal insurance to drive for lyft, all these things and the insurance we have to buy should be deductible and it should be deducted according to the percentage of personal use.

      • patrick obrien

        Jo Blow TakingithecityChicago

        We have both regular insurance from State Farm and an expensive policy from Geico- (we have multiple cars, only one for Uber)is only for rideshare designed for drivers. It costs approximately 1600 annually. This is deductble congruent with the amount of time I drive for hire. Yes or no ? Also all tolls gas and everything else I buy to conduct this rideshare business is deductible. If the car has been paid off, how do I calculate the depreciation? Do I just come up with an annual figure based on its current value from blue book? Thanks

        • Will Mette

          Jo, first if you do not take the standard mileage deduction, then 100% of the rideshare rider should be deductible along with a percentage based on the time you drive.
          You can take straight-line depreciation or accelerated depreciation. See a CPA, tax firm, or just go with the mileage deduction.

  • Denis

    Uber has insurance plan which covers commercial use. They charge 1$ for every single ride. It’s about 400$month in my case + my personal insurance 130$ = 530$ which is equal to real commercial insurance

    • Paul

      yes but your personal insurance does not cover you when you are looking for a passanger. Uber doesn’t cover that time period either.

      • Richard Harney

        You are never “looking” for passengers. Passengers contact you over the phone when they need a ride. So, yes, your personal insurance does cover you between riders because you are not getting paid by Uber during that time. That is different than say, a pizza delivery person because that person is still on the clock or a taxi driver because a taxi IS looking for riders. I often leave my app on while I sit at home and leave when I get a ride call. Does that mean if there’s a fire in my house I’m not covered because my app is on?

        • Paul

          Well, I hear that that if you get into an accident while waiting for a ping you can’t tell the insurance that you were driving around waiting for a ping but you have to make up a story like ” I wanted to visit SF. If you insurance finds out that your motivation for being in SF was for Uber they will drop you. You also need to lie about why you were driving around in that area cause it can’t be work related and hide your Uber sign so know. This is insurance fraud.

          • Richard Harney

            Wanted to visit SF? If you go to another Uber market, you have to sign up for the new market. I don’t think I can leave Kansas City and just go to Chicago and start Ubering. You have to register again for the new market.

          • Paul

            Yeah, I am talking about California insurance and working for uber there. Don’t know Kansas City and the insurance laws out there

          • Richard Harney

            Oh, well if it’s California law, they require drivers to have personal TNC insurance.

        • Kevin Jackson

          You are covered by uber insurance from the moment you go online. A secondary policy kicks in when you pick up a passenger this is directly from Ubers website help section

      • Steven Stone II

        Actually they cover you as long as your driver app is on.

      • Kevin Jackson

        You are covered by insurance through Uber from the moment you go online. Check out Ubers help section on there website

  • PCFixerGuy

    I’d like to chime in with the additional deductions that I believe are Legitimate as well and the reasons why.

    As part of the Uber experience, in their video, they state that Uber drivers should dress nice. To me, that immediately flags “uniform” in my head as far as I’m concerned and it’s a requirement for the job that I be in costume as it is outside of my normal everyday attire. I started this off with no money, so I went to a brand name consignment shop and bought 6 pairs of Khaki pants and 5 or 6 long-sleeve, very nice, button-down shirts. This is specifically just for driving. Deductible? I would say so. Please, someone adjust my thought process on this if I’m wrong. This deductible was about $100-120. Would have to look at the receipt. OH and a pair of shoes from there.

    The Car washes, Agreed: I’ve signed up at a local car wash for their club plan that has unlimited washes. I got the highest one. $65 per month. Why? Because with Uber, your first impression lasts the entire trip. When someone sees a pollen- or salt-covered vehicle roll up to them, first impression is: “Ugh” or “Ew.” So in this case, try to keep up the 5-star rating to appeal to more customers all the time is important to me. So I have a deductible that totals $780 for the year right there. BUT… you can’t always get to the car wash and may just need to do a quick spot clean.

    Storage box: You can find some sort of small storage big for things to keep in your trunk or on the floor in your front seat. I custom-built one myself in my minivan because I wanted it to be very vertical to save the real-estate in the car for passenger luggage. Holds the Windex, a paper-towel roll, a small cooler at the bottom with an icepack and about a dozen waters. So the Windex, the paper towels, the cooler, the materials to build it is all deductible. In addition, buy Goof Off spray and a Goof Off Wipes container. As well as a nylon scrub brush (usually for tubs/toilets). All of this is 100% usage on Business and is considered separate from mileage as tending to your customers or their voids is NOT covered by mileage reimbursement. One customer gets in your car with dog shit on their shoes, and you’re toast for the rest of the day. IF you’re not prepared (Sorry for the swear, but that rider really got to me.) ESPECIALLY if it is hot.

    In addition to the chargers mentioned for your phone… and potentially the customer’s phone, any mounting equipment is deductible as well for steady use in the car.

    Aaaaaaaaand then the fun stuff…

    SPOTIFY!!! I have a monthly membership to Spotify. Now being used 100% of the time for Uber driving. That’s $10 per month. Another $120 per year. Some state that the percentage is only when the rider is in the vehicle. This is untrue. You are portraying an image for your clientele. They are on the streets. You play music, potential clients can hear it. Therefore, you are promoting a comfortable or fun ride before they even get in. 100% deductible. Unless you have a full time job and you use it on your commute without being logged into the Uber Driver App… Then do your math from there.

    Your house!! Yes! “For real??” No. Not really. But your garage? You better believe it! If you keep your car in your garage (unlike me because my garage is filled with crap because I’m still currently sucking at life while I use Uber to get myself out of this hole), you can use any costs for maintaining that garage as deductions including, but not limited to: Monthly security system alarm, cleaning stuff, repair bills, etc. “But I don’t pick up riders in the garage?” That is correct, but do you ever sit at home logged into Uber waiting for a ride to come along while you do nothing? You are protecting a business asset with the garage. It’s maintenance is deductible. IF you have a free standing structure (aka not attached to the house) as a garage, the value of that entire structure is a write off. You have an appraiser come in, find out the value of the garage (say $25k) and then you divide that over the total value of your home (say $300k) and your mortgage payment with insurance and taxes is $2,000 per month, then 8.3% of $2,000 per month is deductible. (Wow, this just worked out to some weird coincidental math…) Which comes to $166.66 per month, aka $2,000 per year for a deductible (haha, that was the weird part. $2k again?? huh? Twelve 25’s in 300. Haha Woops. Math geek).

    Does your phone connect to your wifi to use your internet in your house when waiting for a rider to connect with you? Sure does! In this case, a portion of your internet bill (every month) is deductible. I would leave the app on for hours sometimes to get a driver (sort of rural where I am). So total usage of my internet can’t be determined by time or data. You can only do it by devices. How many devices do you have in the house that connect to the internet. My house: 13 devices counting the TVs, Amazon firestick, phones, cell phones, laptops, etc. I have FIOS at $80 per month. $6.15 per month. $73.85 per year of that would be deductible because as that is roughly 7.7% of the total cost for the year (which came from 1/13 of $80 times 12 months). Most of you won’t be stupid like me and have that many devices so it will be way higher. There is a rule of how much of that 1/13 usage is for business. But when the number is that much lower than your actual internet bill, pennies don’t really start to matter because at that much the estimates don’t get argues even in an audit.

    END OF MY DD (Deduction Diarrhea)

    Some people find doing deductions a huge hassle and not worth the return on time invested. But most of the time, you’re just giving away free money to the government that should actually be yours to keep based on incurred costs to run your business. So stop doing that. Keep up with your deductions every week. Sort them into a file folder and document them often rather than waiting until the end.

    SCAN YOUR RECEIPTS!!! There is an app called TurboScan on the iPhone that I use. It was $3 I think. SO worth it!!! Have you ever gotten into your car in the middle of summer only to jump back out because you couldn’t even take a breath in there from the heat? Ever pick up a receipt that was in the car in that heat? Yup… completely white. And now USELESS for any deductions because it’s now blank. Same thing happens if you keep receipts in your wallet for too long. TurboScan allows you to convert them to perfect black & white copies just by taking a picture of it. Keep the app on your phone and take a picture of the receipt. It will even timestamp it and you’ll have it for later any time.

    Ok I lied about it being the end…

    REFERRAL DEDUCTIONS!!

    Part of your business to make money is to get other drivers to drive with Uber. Go to vistaprint and make some cheapy business card that has your referral code on it. Go grab McDonalds or something (get OUT of your car) and go into the restaurant. If it’s not so busy, make a quick small talk with the poor dude behind the counter working minimum wage. Tell them you’re an Uber Driver and you make a lot of money just driving people around. Give them one of your business cards. And Voila! Your meal is now deductible because you were discussing business and made that purchase. So basically, all of those meals you may go out to eat for can be deductible if you have business cards with you and you are recruiting. You’re going for that $400 referral bonus! It’s an expense!

    There are a lot of ways to shift the system into your favor. But is it really making it into your favor illegitimately? Not at all. It’s just stuff no one ever realizes is actually deductible.

    So that ends my debacle of advice for deductions. 100% of this post is made up. I have nothing to go on except a link to irs.gov for the part about the garage maintenance being deductible or a detached garage being deductible (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Home-Office-Deduction).
    I’m hoping there’s some CPA out there that calls BS on me OR…. better yet, can confirm that my assumptions above are accurate and actually CAN be used as deductibles.
    Many drivers out there will try to be sketchy. Many won’t even file their taxes and could get away with it. But if you can legitimately justify your expenses are for business purposes, there’s no reason to have to lie about them. You just have to know how beneficial it is for you to put the effort in to keep the money that is really yours.
    Oh and lastly… the cost of those business cards is deductible too.
    Thanks,
    Paul

  • Augustus Sotelo

    I know these listed here are for Uber Drivers but can anyone also use these if you deliver food as a private contractor?

    • Marko Glisic

      If you are 1099 independent contractor, then yes.

  • Piotr

    I’m confused about the car payment…can I deduct my monthly car payment if I actually purchased it and not just leased it?

    • Alex Doman

      You have to depreciate the vehicle over time or use the 179 deduction. 179 has a recapture so be careful. Other rules such as gross weight ect.. apply. You can’t just deduct a monthly payment. Its not that simple

  • Max Dragonard

    Beware!

    “The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas and oil.

    Taxpayers always have the option of claiming deductions based on the actual costs of using a vehicle rather than the standard mileage rates.”

    In other words, you can either take the mileage deduction OR you can itemize your expenses–gas, insurance, maintenance, repairs, etc.–you can not do both.

    http://www.irs.gov/uac/Newsroom/New-Standard-Mileage-Rates-Now-Available;-Business-Rate-to-Rise-in-2015

    • Lou Lohman

      If you use the standard mileage rate (which is probably better for most drivers, and much easier to keep track of), you can still deduct things you buy for the business that are not vehicle-related, such as drinks/snacks for the passengers. You’d deduct them as supplies. Just make sure you don’t eat them yourself. 😉

    • Bradley Jenkins

      Thanks for the clairification Max. The standard mileage deduction is 57.5 cents per mile correct?

      • Peggy Van Aller

        For 2015, yes,the Standard Mileage deduction is 57.5 cents per mile. A lot of times the mileage gives one a greater deduction, but I’m working on a tax return for a client right now and his fuel, repairs and maintenance expenses are exceeding what he’d receive vs mileage. Additionally, adding his vehicle as an asset provides a depreciation expense.

        • Bradley Jenkins

          So which way is most cost effective?

          • Willie Wilmette

            If you drive a lot of miles and had no major accidents/repairs, the Standard Mileage deduction is 99.5% of the time the way to go.
            If you bought a new Uber Select car, look at both ways and see which works for you.

          • Joey Sadoy

            Drive a car that gets very good gas mileage…57.5 cents per mile is a great deduction! Gas in Hawaii is about $3 per gallon. If you drive a prius that gets 50 mpg…that’s only 6 cents per mile of driving! For ever 100 miles of driving your getting $50 of tax deductions…that’s good. If you do it right…you can make some $$$ and not pay much taxes at all. Keep down you operating costs is the best way to go.

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  • plynth

    What is the limit of Standard Mileage Deduction you can take for your amount of income?

    • The Federalist

      The limit is your income. If you are paid 20000, the limit is 20000.

      • weng

        Hi, if the income is 20000 multiple it by .54 cents = 10800, is that the amount as expenses?

        • The Federalist

          No, the limit of your expense is 20000.

          • Willie Wilmette

            If you drive 20,000 miles your deduction is $10,800.
            If your revenue was $10,000, your deduction would be $10,800, you would show a $800 loss which could be applied to future income.
            If your revenue was $20,000, your deduction would be $10,800, you would show a $9,200 profit.
            This example is oversimplified and assumes no other deductions,

        • Sean

          That is stupid. You multiply your MILES by 54 cents NOT your income. Also, IF your income was 20,000 and you drove 40,000 miles your amount would be $21,400. That would be considered a LOSS (Uber is a business and some have losses)/ That number would go against any other income you may have. Your schedule C wold show a business loss. As a general rule, if your business can not continually show losses

  • Eva Larson

    If I am an Uber driver and want to deduct gas/milage during my trips, can I could both to the drop off location and back home? For example, if the passenger has be drive 30 miles away, can I claim 60 miles since I have to drive back after the drop?

    • RichMy

      good question

    • Willie Wilmette

      If you have a home office, this should not be an issue. A desk/table for exclusive business use is all you need – not a whole room.

  • Will Mette

    If you take Uber/Lyft rides to do research on how other drivers operate you can deduct those, too.

  • william fernandes

    Question i have a Car that is bought for me to use for driving for uber but the car isnt in my name for payments or regerstration ? Im new to the UBER and paying taxes !!! I also plan on paying off the car and Buying in cash a Newer -Used car Cash out no car payments and have it paid for total ! If anyone Has the Same Problem as i do Post it to this Question ! Thanks !!!!!

    • Will Mette

      As long as your name is on the insurance you will be OK to drive the car

  • Rony John

    I got my car for personal use and Now, Ive signed up for uber and lyft. Can I still claim standard mileage deductions for the 6k miles I drove for uber & lyft?

    • Willie Wilmette

      Yes.

  • Maria

    As an uber driver, are you able to deduct any portion of your home office space?

    • Will Mette

      Yes! If you do have an office (can be as little as a desk or a table or an entire room or floor, be super careful if you claim the entire floor and expect to be audited) you can deduct miles driving to and from work. Of course, you can always deduct them if you have your app turned on.

  • Jessica Evans

    Can your lunches be deducted on your taxes as an Uber/Lyft driver?

    • Willie Wilmette

      50% of meals or use can be deducted if you travel out of town overnight for business purposes.

      To write in town meals off, there must be some substantial business discussion before, during, or directly after the meal. If you expect to get some income or business benefit from providing the meal, it also qualifies as a deduction. As with travel-related meals, you can only deduct 50 percent of meals as entertainment expense.

      Document how much you spend & who else was there! Prepare to be audited because this could trigger an audit if the vast majority of drivers do not deduct meals.

      See https://www.irs.gov/publications/p463/ch02.html#en_US_2015_publink100033883

  • Airy Adriana González Peralta

    No, you can rent with Lyft and if you do 70 rides it is free (well you pay the taxes, which is $4 dollar per day) + no mileage limit.

  • Airy Adriana González Peralta

    I rent a Lyft-Hertz car, I was wondering if can I still using the Standard mileage method as when I use my own car or I have to keep tracking for the actual expenses…thank you.

    • Jarid Moon

      I’d expense it, if you are renting a car. It seems it would be very costly to rent something…

    • yeah, unless it’s long term like a lease it seems expensing the whole thing might work out better

  • Fay Bennani

    Happy holidays and happy new year .

    I m full time uber
    driver 60 to 70 hours per week, i bought a brand new car this year just
    for using for uber no more, I wanna shoose the mileage option at taxes
    because i made 40.000 miles ,*** my question is wish others expense i
    have to add with the mileage option also i heard when the car is new was
    bought just for doing uber and i m full time driving for uber the using
    car almost 100% for uber that i can add the depreciantion of the car
    for the first 5 years.pleas i need to know that because is so much money
    to deduct with the depreciation + mileage and more expense.

    thank you and happy 2017

  • Annette Morrison

    As a tax professional doing taxes for over 10 years, I would like to see a tax return that has been audited by the IRS and how much in this discussion is actually allowed by the IRS.

    • Wguy

      Just out of curiosity, as a tax professional, how come you don’t know the answers to this stuff? Wouldn’t you be able to call out what is and what is not deductible if that’s your business? Do you do taxes for people and then wait for an audit to see if the IRS allows what you deducted for your clients?

  • Wayne Farley

    so can you deduct the mileage looking for costumers/

    • Willie Wilmette

      If independent contractors have a home office, they can deduct mileage to their staging area & from their last drop off.
      You can deduct all miles while you have your app on.
      Lyft/UberX drivers can not go “looking for customers” because Uber/Lyft do that for you, but I think you meant one of the above.

      • Wayne Farley

        Thanks

      • thistimearound

        Can you expand on that more for some of us novices? Say I live 5 miles from downtown. Do I only get to deduct a 10 mile round trip from when I start working each day to when I get home? Or can I deduct every mile placed getting to and from each pick up?

        • Willie Wilmette

          If you have a “home office” (this can be as small as a desk or table) you can deduct all of your business related miles for the day.
          Without the home office, you might need to subtract 10 commute miles each day.
          If you have your app on, you will not need to deduct those commute miles.

          Is there a reason you do not wait at home for the first ping?

          • MLukk

            The ping goes to the closest driver. Since I live in a residential area 8 miles from Metropolis, I can wait an hour before the first ping. When I am nestled between the local hotels, it is typically 4 – 5 minutes….

          • Will Mette

            Good answer MLukk.

        • Nick Kent

          IDK why don’t check it out your spiffy t-mobile phone since its so superior to Verizon

    • Sean

      You CAN deduct when you are enroute to a passenger or placing yourself into an area where there are people

  • dave johnson

    misleading and or incorrect. if one deducts the 54 cents per mile, nothing else can be claimed. PERIOD. the 54 cents per mile is the amount the government “thinks and agrees” that INCLUDES ALL of these other deductions.

    • Willie Wilmette

      Publication 463 (2016) says if you use the standard mileage rate for a year, you can’t deduct your actual car expenses for that year. You can’t deduct depreciation, lease payments, maintenance and repairs, gasoline (including gasoline taxes), oil, insurance, or vehicle registration fees. Any other deductions should be OK, such as interest.

    • Sean

      You didnt read the freaking article. The article CLEARLY states you can choose STANDARD or ACTUAL. This is the same as an ITEMIZED deductionns on yoru 1040 or taking he STANDARD deduction. Tracking both ways is the smartest way. I CAN deduct my cell phone (since that isnt part of my car). I CAN deduct food drinks or anything that is NOT associated with the car

  • Marc

    pay for tax in booking fee , i don t have this money

  • Wguy

    That’s a pretty sweeping statement. Especially since these companies (e.g. Uber, Lyft, private leasing businesses etc.) lease out cars to individuals everyday for ride sharing businesses. Can you please explain what you mean by “illegal” and site where you’re getting that information. Thanks.

  • Eddie Anderson

    I spent over $3,000 in gas last year just alone for my 2008 Honda CR-V…. not to mention the $3,600 I spent on maintenance costs with a rack and pinion replacement.. I think it’s safe to NOT go the mileage route since I had to pay for so much f’n service. Grrrr!

    • Will Mette

      How many miles did you drive?
      If you use straight line depreciation, can you use the per mile rate next year?

    • Bradley Card

      Don’t forget to take in consideration that you have to divide all that made into money by the percentage that you used your car for Uber or Lyft. So $6700 and you used you car 50% of the time is only $3350 for deduction. I have more then that for mileage deduction for 5 months 2 days a week! Best of luck.

  • Cristina Esteva

    I have the same question Ben

    • Zachary Meyer

      maybe if you have the uber app on when you driving to it and leaving the garage. put a desk that you only do uber work with. IE calculations/research. in your apartment. now you made. as the others said. that makes the drive to it part of going to work. the fees are the cost of doing business. do it right and you can claim the garage fee, and leaving and coming as tax write offs. your home office requires the garage so its able to be written off. since there is no street parking. at least i think thats how it works from what i read

  • Cristina Esteva

    Hi There, I do uber as a part time and I had an income of $22,000 in 2016. Using Turbotax Home and Business when I enter the income $22,000 the tax that I have to pay is more than $9,000 , Can this be correct? Any tip how to fill it? Thanks!

    • Yoji Endo

      That seems incorrect. If that is your only income, you should deduct whatever the standard deduction is for your filing status. $2840 is the tax liability for 22k income before any deductions. 10k is the standard deduction for a single person. Which brings it down to 12k. Tax liability for that is $1230. This has not even considered deductions for mileage driven or any other deductions you are entitled to. I’m guessing you have other income somewhere.

  • vahe

    hi
    I bought my car 1 year ago just for uber and lyft driving
    I drove 40000 miles I have another caar and I never used my car for personal use
    But I didn’t use any mile track application and my proof is my odometer
    can I use that all my mileages for deduction?

    • I am pretty sure you have to have daily mileage numbers. My husband got audited once and they demanded numbers. Listen, you can dummy it. Get your uber and lyft statements and ‘build’ a plausible start mileage and end mileage for each day. Write it in a notebook as if you had kept it. Change pens every so often. Put a coffee cup down in a couple of places so it looks well used. Vary the daily totals, of course, consistent with the uber data.

      I would not give this advice to someone who had not actually driven those miles, because that would be a sin, and in the end, whether or not you believe in hell, lying gives you wrinkles. But I believe you that you actually drove 40,000 miles. That would be about 833 miles a week or about 120 miles a day (I busted out the calculator). You need to be able to claim that, so get to fabricating.

      • Sean

        The eeasiest way to do this is in a spread sheet. IF you use your car exclusively for business, then put a column for beginning mileage and ending mileage (cab companies actually do this)

  • Deplorable PEPE

    UBER is a SCAM!
    There’s NO WAY so many UBER fares are available on Long Island and even NYC.
    Every other car has a taxi license plate.
    This should be investigated.

    • Sean

      You dont understand wwhat Uber or Lyft is then. A car that is a taxi can ALSO be a Lyft or Uber car (with the associated rates). IF that car gets dispatched through thheir cab company you pay that fee. It is using the asset (car) for multiple income streams.

  • Robert Paulchapman

    I am planning on driving for Door Dash using my personal vehicle Monday to Thursday and driving for Uber using a rental on Friday and Saturday. Would I be able to claim the standard mileage rate for the Door Dash work I do using my vehicle, and claim itemized (Rental Fee and Gas) for the time I use a rental?

  • Juan Morales

    I’m a part time Uber driver but had to take time off for medical surgery, would I be able to claim any of my expenses during that period without work?

  • wolfgangsta

    Ok so in Nevada we need a business license so can I just go with the associated tax if I drive full Time? Under 50k after deductions is only 15% plus 1.25% state. Im averaging about 1200 a week right now. Well as of writing this I just realized if I deduct mileage and itemize other deductions mortgage and property tax home office ect my income drops to less than 15%. Any advantage to filing as both a business and individual to reduce tax burden?

  • Willie Wilmette

    If you use the garage and car exclusively for business then yes.
    If not, I am guessing not, but check with an accountant.