you have so many more deductions and write offs than just mileage. Cell phone plan, car washes, cell phone device cost, tolls, administrative expenses, 50% of meals on the road just to mention a few. If you averaged $1 for 100k miles you should be in the 10 to 15K tax liability if not lower

 

Came here to say that. I rarely had income worth documenting. Too many expenses to write off!

 

Options 2 and 3 are fraud. Proceed at their own risk but the consequences for getting caught could be life threatening.

As @priusorlando wrote, even without considering administrative expenses (claiming a home office for example might call a little attention to you) and meals at 50% which I'm not sure you can do unless you are going on an overnight trip, they should still be able to gross 60 to 80K easily without going over 21K in income. They will probably want to do a quick check on a piece of paper midway through the year to make sure they are not being too successful. Something as simple as:

Revenue
-miles driven *.7
- tolls
-cell phone % used for business (100% if you have a separate phone)
- car washes or any other appearance products/accessories

Just remember that you can't deduct gas or repairs since you are taking the mileage deduction.

 

Say you make an average for 1 dollar a mile. Say you drive 100K miles a year for example. And you get standard deduction of 70 cents per mile. Does that mean your effective income is $30K a year?

1/ So that means you are limited to drive $.30 times 70K miles equal $21k effective income?

No.

The mileage deduction of 70¢ per mile covers all miles driven, both "engaged" (travelling to pick up pax and with pax on-board) and "non-engaged" miles, meaning that the deduction on 100,000 miles would be $70,000. On the other hand, drivers only get paid for engaged miles, which will be fewer than 100,000 miles, meaning that, at $1 per mile, his revenue will not be $100,000.

Taxable income (i.e. the figure used by Medi-Cal for eligibility) is heavily influenced by the proportion of engaged miles to total miles. Assuming 75% of total miles are engaged, at $1 per mile, that would give revenue of $75,000 and a deduction of $70,000, leaving a net profit (before other expenses) of $5,000. In this case, the driver would qualify for Medi-Cal.

Just about the only reason rideshare is still worth doing is precisely because drivers can claim mileage allowance on all miles driven, meaning that at the end of the year they show little to no taxable income.

2/.Can his relatives, like a brother or sister or mother form a S corp and he does Uber but have Uber pay out to that S corp?

3/ Can he go to work as Corp to Corp contractor and have the employer pay that same S Corp owned by a relative?

There would be no point in doing this as S-Corps are pass-through entities under the tax code. That is, the taxes paid are the same as would be on a personal tax return.

 

If you make a few dollars more than the $21,000 limit, you will lose medical. The only way to make it work, is to make no more than $34,000/ year because they use a standard formula of your net being 60% of gross income and they ask for your last two months Uber monthly pay statements.

When I had to requalify, I literally netted less than $34k for the year, but my previous 2 months earnings statements were from my busiest months, so they based their calculations on my making that amount consistently throughout the year, and took me off medical.

This is just my experience, but I would not advise making any more than $2800/ month, in order to maintain coverage.

 

If you make a few dollars more than the $21,000 limit, you will lose medical. The only way to make it work, is to make no more than $34,000/ year because they use a standard formula of your net being 60% of gross income and they ask for your last two months Uber monthly pay statements.

When I had to requalify, I literally netted less than $34k for the year, but my previous 2 months earnings statements were from my busiest months, so they based their calculations on my making that amount consistently throughout the year, and took me off medical.

This is just my experience, but I would not advise making any more than $2800/ month, in order to maintain coverage.

I think if you do it through an LLC or S corp then it is different.

60 percent of gross personal revenue is 0.

Your income will be the revenue of the S Corp minus the expense. This will be very little after đeduction

 

How about this:

His sibbling would own and sole proprietorship or either S or C corporation, and this business structure would hire him to do the driving. All income made from his work, Uber is to pay to the bank account of this business, with appropriate TAX ID, then each month the structure would pay him and small amount?

 

Just do cash private rides. Good luck to you.

 

Here

 

Wow! Further proof that AI should never be trusted for anything important.