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Discussion Starter · #1 ·
Any clues on how to find the best recordkeeping, tax filing advice? Key word search shows a lot of info on this from 2016. Bah-humbug. I'm thinking I might get a CPA's help once, and see how they organize and arrange...and do my own work after. But maybe there are tax magicians to be found.

I save receipts and records, and am moderately educated on common deductions. I have been hammered with car expenses over and over and have not contacted the IRS at all this year (last year I did not earn enough to get a 1099 and just used TurboTax).

Perhaps I'm equipped to handle it on my own. I use Excel, although I'm kinda playing catch-up with logging everything and thinking my bookkeeping may not need to be as meticulous as I'm making it. I enter weekly earnings. I copy & paste fueling records from Speedway. I document mileage at every fill-up. My mileage is for sure 95% rideshare--maybe higher (I record exceptions)!

Not looking for app suggestions, by the way. I know the best rated ones and am not interested.

I'm not real big on traveling far from New Lenox/Mokena for help. But I suppose it's a 1x or 2x consult and maybe there's a real magician out there with Illinois-specific advice.
 

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You only need to log your miles. An App would do it. You do not need a tax pro. Very simple, use the tax papers from uber/lyft, fill out the forms. For deductions use your mileage. Thats it.

You you cannot deduct car is expenses, gas, food, tolls, etc.

But

If you have a company and your car is registered as business and if you use your house room as an office then it is a different game.
 

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Discussion Starter · #4 ·
My understanding is I could EITHER tally deductions OR use mileage. I have had a horrendous year for repair expenses--and a now-fixed oil burn problem that sucked $300 in oil and oil changes. That, with other allowable deductions, COULD make that the more viable route.
 

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My understanding is I could EITHER tally deductions OR use mileage. I have had a horrendous year for repair expenses--and a now-fixed oil burn problem that sucked $300 in oil and oil changes. That, with other allowable deductions, COULD make that the more viable route.
You can use one or the other. The mileage rate for 2018 is 54.5 cents. As long as you have all your receipts for your repairs, add them up and compare it to your mileage, and use the larger of the 2 as a deduction. Regarding mileage, I would still use an old fashioned mileage sheet and not rely on the apps. EVERY IRS approved form I have ever seen for mileage has starting and ending mileage on each line. I haven't seen an app that does that yet, but they claim to be IRS compliant. Personally, I take a picture of my odometer when I start and finish, that way I have exact mileage and a time stamp as well.

If you shoot me your email, I can send you an excel spreadsheet I use to track miles and earnings.
 

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Rule of thumb, the older your car, the higher the odd that the standard deduction is better.

And reverse, the newer the car, oddsare itemizing your expenses, depreciation is better.

Depreciation rules sometimes are complicated. Dunno what they are like for Uber as it never applied to me.

Read up on depreciation first. If you still have questions, then maybe a CPA will be useful.

But even with a big repair bill, standard deduction might still is better. All depends on your car, etc
 

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I'm not an expert but I seem to recall when I had looked into this a few years ago that to take depreciation in a year after taking mileage on the same vehicle you have to lower the base value by the mileage amount you already claimed which substantially reduces it's value likely pushing you back to standard mileage again (but not always).
 

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I’m a CPA and, while not an expert at rideshare taxes (I am mainly an auditor), I do know a lot. There are two ways of reporting. If you drive a lot an expert could help. Like someone said, if you have a newer car doing the actual expenses can save you a ton as you can use MACRS depreciation. It’s basically a way to take depreciation on a accelerated basis so the first year you report you get a lot of depreciation deducted and your tax liability is very low. Be careful though, there are a ton of small rules. If you start with the standard mileage then switch at a later year you can only straight line depreciate, there’s so much much involved that only an expert or a geek like me who enjoys this can do.

From my knowledge, especially for a newer car, is best for actual expense method, you get depreciation, you can deduct some of your insurance, the interest on your car loan, car washes, water for passengers, gas, registration, city stickers, cell phones, and more. Problem is it’s a lot of work tracking this stuff. A CPA will ask for your receipts and will ask for the records you record. They’ll then work their magic, I don’t think watching them one year will help as they won’t do it in front of you.

If you have an older car or just lazy the standard mileage works. Just remember that the mileage under gives you is not the total you can deduct. You can deduct more. If you are in between trips and the app is on this is deductible, I don’t think Uber gives you this mileage (just the trip mileage). If you get a ride to the burbs and have to drive back to the city, those dead miles are deductible.

You can do both then at the end of the year compare your deductions. Drivers can save a lot of money, hundreds if not thousands of dollars If they do this right. I think a lot of people don’t think about it until tax time. Unfortunate the IRS has algorithms of who to pick to audit. A big red flag are business owners and independent contractors as it’s easy to manipulate expenses. So if someone makes a lot driving I’d be careful, audits suck and they WILL ask for all receipts to back your claims.
 

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Discussion Starter · #13 ·
Alright to clarify. It's an older car, and repairs have been exorbitant in 2018! Depreciation is not on my radar. I'm trying to resist procrastination and file estimated taxes for the first time.

99.5% of my travel is for Uber or done while on my path home from Uber. When I file I will be conservative and say 95%.

80sDude, I'm the same Halfmybrain who calls drivers cowards if can't be real with a rider and say, "I have no intention of waiting" when they plan to cancel at a Stop. Do you think I am so pathetically weasely that I need to lie to the IRS?

Chibry the hint about written mileage is good. Glad I'm already doing so, with Excel. Not a fan of any of those apps.
 

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Two points I can add in here. One, tolls are deductible whether you use actual expenses or the mileage rate. Also, if you want to use the mileage deduction, you can only do it starting with the first year you put the car into service for rideshare. If you use actual expenses in the first year you file with a car, you have to keep using it for that car. If you get a new car (new to you; used is fine), then you have the option to use either method.
 

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halfmybrain. first keep in mind I am an auditor and don't prepare Uber taxes, just my own and friends. I do know a lot because I'm a nerd and like this stuff.

If I were you and doing 99.5% of my miles for Uber I would keep track of both mileage and actual expenses. If your car is breaking a lot and has a lot of expenses the actual expense method might be best. If it's not paid off it's even better (well bad that you have to pay interest). With the actual expense method you would be able to write off 99.5% of the car repair/maintenance expense (i.e. oil changes, transmission work, etc....). Other items you'd be able to deduct 99.5% of:

- interest on a car loan (big one)
- 100% of phone costs if you get solely to use for Uber
- maintenance expenses (repairs, oil changes,etc...) (potential big one, hopefully you don't have a lot of these)
- car washes
- gas of course
- parking fees used for Uber
- registration fees
- city sticker
- car inspection fees to be able to drive Uber
- items used in the car such as a phone holder for your window and charging cables
- car insurance (big one)
- depreciation (potential big one for newer cars)
- garage rent
- tires

I think those are the main ones, if you're bored check out Schedule C on the IRS and Publication 946. Fascinating stuff ha.

By the way, tolls are not write-offs if you are doing them with Uber, doesn't Uber reimburse you? I know Lyft does. Although tolls coming back from a dead zone would be deductible as they are part of your trip.

A writer indicated if you use the standard mileage method the first year you have to stick with it. That's not exactly true (see
To use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Then, in later years, you can choose to use the standard mileage rate or actual expenses. To use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Then, in later years, you can choose to use the standard mileage rate or actual expenses.

The first year you are required to use the stand mileage method - if you don't you must use that method for the life of the care (this talks more about that on the IRS site - taxtopics - tc510) . But if you use the standard mileage method the first year you can switch to actual expense in a later year and switch back and forth (subject to restrictions, talk to an advisor!) So if you aren't sure, make sure you do actual mileage the first year. Also note that even if you use the mileage method you can still deduct:

- parking fees
- tolls for dead time
- interest on your car loan (this would be the big one)

So complicated!!! Have fun! I'm not an expert but those are the basics I know about.

P.S. I'm SURE everyone is honest on here and loves paying taxes. But these are the red flags that may get you audited:

- if using the standard method you have a number like 10,000 rather than 10,243;
- you deduct 100% of your car as a business expense (most ppl use a little for personal! This is a big one.)
- if you have no income or a loss due to deductions

etc....

And for those who may have messed up :) keep in mind:

The statute of limitations for an IRS audit or assessment is:

1. Usually 3 years from the due date (not filing date, so April 15th usually) for math errors and other omissions and less than 25% of an error/deduction;
2. If more than 25%, it's 6 years;
3. Fraud/false - No statute of limitations

And they back assess you so if you underreported by $1,000 2.9 years ago, they assess interest on top of the $1,000. Plus sometimes a fine.

Ok I'm done, can't you tell there's a reason I am a CPA, love this stuff ha. One of the rare people in the world. I like it better than auditing firms.

Good luck!
 

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Just to clarify my earlier post, as Chibry said you can only use the standard mileage rate if you use it the first year the car is put into service. I was unaware about being able to switch back and forth, but you definitely need to do it the first year if you want to use it after.

Regarding tolls, while U/L do reimburse they also include it in income, not breaking it out separately. Since they are a pass through expense, they are deductible to the extent they are directly involved in your rideshare business. Think of it as similar to the $5.00 airport fees Uber charges back to pax - pax pays fee in their total breakdown, but it's not part of what U/L made on the ride because a third party received that portion of the payment. So the tolls paid by pax are treated as income to us but also deductible.
 

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I have an accounting degree and will do your taxes for 30% of what I get you back. I'm also a driver so I do my own and know what to do. Contact me if you're interested. All legal and you'll get more on your refund. We talk and you decide. If yes we do it if no you pay your cpa the IRS and get less back. Up to you. Let me know.
 

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I am an expert with a tax Agency in the South loop. I noticed that you said last year you “didn’t earn enough to get a 1099.” UBER does not send out a 1099-Misc, and if you’ve haven’t done $20,000 or 200 transactions, they won’t send out a 1099K. HOWEVER, if you made more than $400 in self employment income, you need to REPORT THE INCOME. You are subject to self employment tax even if you have no income tax liability. I recommend definitely getting a good bookkeeping software that can run reports such as P&L, and cash flow, and you may also want to speak to an expert about setting up a solo 401k to help further reduce your tax liability. There are other considerations & techniques that a knowledgeable professional could help you out with; but since you want to pay one time & copy the work for future years, why not take a tax class? Professionals are looking to build client relationships, not issue documents for copy catting.
 
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