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I rent a car for uber. In nyc, thats over 400 a week. So I plan on deducting rental fees and gas instead of mileage. I only use the car for work, but how can i prove that? How can the IRS disprove it? I don't track mileage because i found i was just lumping all the days work into one "trip" "for business". The IRS takes our word about mileage classification, would they take my word if I said car is 100% business?
 

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I rent a car for uber. In nyc, thats over 400 a week. So I plan on deducting rental fees and gas instead of mileage. I only use the car for work, but how can i prove that? How can the IRS disprove it? I don't track mileage because i found i was just lumping all the days work into one "trip" "for business". The IRS takes our word about mileage classification, would they take my word if I said car is 100% business?
A contemporaneously kept mileage log is what you need. It's the only accepted proof. The IRS doesn't have to and won't disprove anything if you don't have a mileage log. Using your car 100% doesn't negate your responsibility to keep a mileage log. Make your mileage log a priority because its deduction value is often close or equal to your total fares!
 

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If i'm understanding you correctly... you rent a car from a garage (with TLC plates?) to use for uber?

If this what is going on, you can deduct using the taxi model.

100% of your miles on a log,

Plus you deduct your vehicle (write it as lease in vehicle expenses) and deduct gasoline. And the IRS will take your numbers as is. This is how cab drivers still do it.

A contemporaneously kept mileage log is what you need. It's the only accepted proof. The IRS doesn't have to and won't disprove anything if you don't have a mileage log. Using your car 100% doesn't negate your responsibility to keep a mileage log. Make your mileage log a priority because its deduction value is often close or equal to your total fares!
This may not be accurate, if your leasing a car with TLC plates. Your actual expenses may or may not be more or less than your weekly lease, you just never know until you do the math. Either way... because it's NOT a taxi... you can deduct the HIGHER AMOUNT and the IRS will probobly never look closely enough to ever know the difference. But you need a log either way.

Don't forget tolls are a separate deduction as well.
 

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If i'm understanding you correctly... you rent a car from a garage (with TLC plates?) to use for uber?

If this what is going on, you can deduct using the taxi model.

100% of your miles on a log,

Plus you deduct your vehicle (write it as lease in vehicle expenses) and deduct gasoline. And the IRS will take your numbers as is. This is how cab drivers still do it.

This may not be accurate, if your leasing a car with TLC plates. Your actual expenses may or may not be more or less than your weekly lease, you just never know until you do the math. Either way... because it's NOT a taxi... you can deduct the HIGHER AMOUNT and the IRS will probobly never look closely enough to ever know the difference. But you need a log either way.

Don't forget tolls are a separate deduction as well.
"But you need a log either way." Yes, everyone using their vehicle (or leasing) for business purposes needs a mileage log. Unless your driving an ambulance, bus, or special purpose vehicle their are no exceptions. Claiming actual expenses or using your vehicle 100% does not negate the mileage log requirement. I'm not sure what you mean by the "taxi model". From the info provided it sounds like tax evasion to me.
 

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"But you need a log either way." Yes, everyone using their vehicle (or leasing) for business purposes needs a mileage log. Unless your driving an ambulance, bus, or special purpose vehicle their are no exceptions. Claiming actual expenses or using your vehicle 100% does not negate the mileage log requirement. I'm not sure what you mean by the "taxi model". From the info provided it sounds like tax evasion to me.
In a strict sense the "taxi" model doesn't require a mileage log under certain situations.

I for instance can instead line item my taxi rental as "Cab company purchase of services". Because this includes dispatch fees, commercial insurance, turkey money to hotels/themeparks/the airport, roadside assistance, the companies cut of my business... all wrapped up in one package.

Because there are records of me SPENDING this money, and if the company is asked they will ADMIT to me spending this money, there's a paper trail for it. ect ect.

This exists this way for a list of reasons...

1. I am in fact paying this amount of money to someone... therefore it is deductible in it's entirety. It is not in any way shape or form my car.
2. The company can be charging me more in a shift than i could ever get in deductible expenses off of mileage if i wasn't the cheapest shift. (and the cheapest car but that is neither here nor there)
3. there is documentation that i am in fact spending this money, and there is documentation of what it is for.
4. It is not "JUST" for a vehicle, this includes all of the above i listed before.
5. if we didn't do it this way we would have to write up a separate vehicle on our taxes for every single different cab we drove for the ENTIRE YEAR.
Cab 1694 250 miles
Cab 801 227 miles
cab 897 355 miles
cab 897 355 miles
cab 897 355 miles
cab 897 355 miles
cab 897 355 miles
cab 897 355 miles
cab 897 355 miles
cab 897 355 miles

Some drivers get a different a cab EVERY DAY... by the letter they would need to write up each vehicle individually.

What we are doing is writing off not the mileage but SHORT TERM RENTAL...

I know it's not an IRS website but many times the taxi industry sets up these expenses as short term rentals rather than long term leases. This website explains it.

http://smallbusiness.chron.com/tax-write-off-renting-car-business-4159.html

Benefits
The benefits associated with renting a car for your business include being able to take a full deduction for the rental fees in the year expended, according to the IRS. If you purchase a car, you must deduct the cost as a capital expenditure over the course of a number of years, based on the expected useful life of the vehicle. IRS regulations establish the time frame for different types of property items.


Records
In order to obtain the full allowable tax write-off for renting a car for your business, you must maintain proper records. These include receipts for all rental payments, fuel, maintenance and repair costs.

Misconceptions
A common misconception associated with a tax write-off and a rental car for business is that the deduction is only available when a car is rented for travel and used out of town. Even if rented in the community where the business is located, a write-off is available for rental car costs associated with a business purpose or objective, according to the IRS.

RIGHT THERE... there's how this works... RENTAL... rent rent baby.

The cab company i drive for does it this way. The longest rental period is 7 days long... some people might take out a cab 300 days a year or 50 weeks... but it's 12 hours to 7 days at a time.
 

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In a strict sense the "taxi" model doesn't require a mileage log under certain situations.

I for instance can instead line item my taxi rental as "Cab company purchase of services". Because this includes dispatch fees, commercial insurance, turkey money to hotels/themeparks/the airport, roadside assistance, the companies cut of my business... all wrapped up in one package.

Because there are records of me SPENDING this money, and if the company is asked they will ADMIT to me spending this money, there's a paper trail for it. ect ect.

This exists this way for a list of reasons...

1. I am in fact paying this amount of money to someone... therefore it is deductible in it's entirety. It is not in any way shape or form my car.
2. The company can be charging me more in a shift than i could ever get in deductible expenses off of mileage if i wasn't the cheapest shift. (and the cheapest car but that is neither here nor there)
3. there is documentation that i am in fact spending this money, and there is documentation of what it is for.
4. It is not "JUST" for a vehicle, this includes all of the above i listed before.
5. if we didn't do it this way we would have to write up a separate vehicle on our taxes for every single different cab we drove for the ENTIRE YEAR.
Cab 1694 250 miles
Cab 801 227 miles
cab 897 355 miles
cab 897 355 miles
cab 897 355 miles
cab 897 355 miles
cab 897 355 miles
cab 897 355 miles
cab 897 355 miles
cab 897 355 miles

Some drivers get a different a cab EVERY DAY... by the letter they would need to write up each vehicle individually.

What we are doing is writing off not the mileage but SHORT TERM RENTAL...

I know it's not an IRS website but many times the taxi industry sets up these expenses as short term rentals rather than long term leases. This website explains it.

http://smallbusiness.chron.com/tax-write-off-renting-car-business-4159.html

Benefits
The benefits associated with renting a car for your business include being able to take a full deduction for the rental fees in the year expended, according to the IRS. If you purchase a car, you must deduct the cost as a capital expenditure over the course of a number of years, based on the expected useful life of the vehicle. IRS regulations establish the time frame for different types of property items.


Records
In order to obtain the full allowable tax write-off for renting a car for your business, you must maintain proper records. These include receipts for all rental payments, fuel, maintenance and repair costs.

Misconceptions
A common misconception associated with a tax write-off and a rental car for business is that the deduction is only available when a car is rented for travel and used out of town. Even if rented in the community where the business is located, a write-off is available for rental car costs associated with a business purpose or objective, according to the IRS.

RIGHT THERE... there's how this works... RENTAL... rent rent baby.

The cab company i drive for does it this way. The longest rental period is 7 days long... some people might take out a cab 300 days a year or 50 weeks... but it's 12 hours to 7 days at a time.
I know exactly what your talking about . I owned a taxi company for 15 years and rented out vehicles in the same manner your talking about! The owner is basically operating a rental business and is the one responsible for keeping the (IRS) mileage log on the vehicles. The drivers can't take the SMD because they don't own the car nor do they have a long term lease. The drivers must use the actual expense method for deductions. The drivers do need to keep track of their income just like every other business. Most states have laws that require taxi drivers to keep trip logs. These logs will show the drivers gross income and the total mileage for the shift. The taxi company can use the mileage for its vehicle logs and the driver can use it to show his/her gross income.
What concerned me is when you said the following:
"If this what is going on, you can deduct using the taxi model.
100% of your miles on a log,
Plus you deduct your vehicle (write it as lease in vehicle expenses) and deduct gasoline. And the IRS will take your numbers as is. This is how cab drivers still do it."

Were you saying that you can deduct 100% of your miles and gas and lease?
 

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I know exactly what your talking about . I owned a taxi company for 15 years and rented out vehicles in the same manner your talking about! The owner is basically operating a rental business and is the one responsible for keeping the (IRS) mileage log on the vehicles. The drivers can't take the SMD because they don't own the car nor do they have a long term lease. The drivers must use the actual expense method for deductions. The drivers do need to keep track of their income just like every other business. Most states have laws that require taxi drivers to keep trip logs. These logs will show the drivers gross income and the total mileage for the shift. The taxi company can use the mileage for its vehicle logs and the driver can use it to show his/her gross income.
What concerned me is when you said the following:
"If this what is going on, you can deduct using the taxi model.
100% of your miles on a log,
Plus you deduct your vehicle (write it as lease in vehicle expenses) and deduct gasoline. And the IRS will take your numbers as is. This is how cab drivers still do it."

Were you saying that you can deduct 100% of your miles and gas and lease?
No i wasn't
 

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You can deduct mileage on a rented/leased vehicle NOT in your name? It seems like the mileage can only be deducted if A) you’re paying the rental company for mileage or B) it’s wear on your owned vehicle. If I don’t pay mileage and it’s not my car, I can still take a mileage deduction? I took gas and rental charges but maintenance and mileage and wear are not costs passed on to be (besides the huge weekly rental charge).
 

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You can deduct mileage ona rented/leased vehicle NOT in your name? It seems like the mileage can only be deducted if A) your paying the rental company for mileage or B) it's wear on your owned vehicle. If I don't pay mileage and it's not my car, I can still take a mileage deduction? I took gas and rental charges but maintenance and mileage and wear are not costs passed on to be (besides the huge weekly rental charge).
If the lease or title is not in your name or your spouses name you can't deduct squat. That's 0, nada, nothing!
 

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Actually, that's not entirely true. I know I can deduct gas, car washes, supplies, and best of all-the $400 per week rental payment. Just unclear on mileage. Thanks for nothing.
If you are deducting gas car washes, supplies and the $400 a week rental payment you are deducting actual expenses, and therefore can not deduct mileage.

You are deducting what it ACTUALLY costs you so that's ACTUAL costs.

If it's your spouses vehicle you can file jointly and jointly run the business together. Even if it's only you doing the driving.
 

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Actually, that's not entirely true. I know I can deduct gas, car washes, supplies, and best of all-the $400 per week rental payment. Just unclear on mileage. Thanks for nothing.
So the rental agreement is in your name? You can never deduct both SMR and actual expenses. Your now using actual expenses so you can't switch to or add SMR for this vehicle.
 
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