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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10122
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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What are the income tax issued to Uber Partner / Drivers. What

Customer Question

What are the income tax issued to Uber Partner / Drivers.
What Advantages do they have.
Can they write off their milage
Can they write off car payments
Can they write off their Car Insurance.
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.
Hi,
Uber partner / Drivers receive a 1099.
This means that they are considered as independent contractors for tax purposes.
SO, unless you've formed a partnership or Corporation, you'll use Schedule C (Business Income and Loss)...
(Here's the form: http://www.irs.gov/pub/irs-pdf/f1040sc.pdf)
... to report your business income and expenses.
The net profit after expenses will flow to line 12 of your tax return (1040).
In terms of deductions, you, as any other business owner, use the business use of vehicle rules for determining your deductions:
There are to methods for calculating your car /truck expenses:
(1) Standard Mileage Rate, or
(2) Actual cost.
But you can only use one, not both, in a given tax year.
(By the way, you can switch between actual cost and mileage from year to year to get the largest deduction ... BUT ONLY if you use the standard mileage rate the first year you pace your vehicle into business)
The standard mileage rate is given each year by IRS and is Designed to take into account all of the depreciation, oil & gas, repair and maintenance, etc. on your car.
Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car, van, pickup or panel truck moved to: ***** ***** per mile for business miles driven, (up from 56 cents in 2014).
By the way there IS on actual cost that can be added, when using the mileage rate; parking and tolls.
If you use Actual Cost then you do deduct ALL of the actual costs of using your car, (depreciation, repair - minor AND major, license & registration, Insurance, Garage rent, Tires, Maintenance such as oil changes and tire rotations, even car washing and detailing)
(Car PAYMENTS are not deductible. That's just paying back the lender for your car purchase. The using up of your car is reflected in the depreciation expenses - if you use the actual cost method - and is "built into" the mile rate if you use that method.
Finally, if you want to use the standard mileage rate and you LEASE, you can't move to the actual method. You must use the mileage method for the entire time you lease THAt car.
Let me know if you have questions ...
Lane
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