· Super Moderator
-Your margin and taxable income are unrelated.My question was really bifurcated in objective. Yes, my market doesn't seem to pay much, or I have not fully understood the system yet to increase my take. That being said, either Uber is not paying drivers enough, hence each trip is statistically a loss according to the allowable mileage deduction, or, the mileage deduction is too lenient and obfuscates the fact that drivers are indeed making a profit. I believe it is probably the latter, and in that case, as someone mentioned above, I will not get any SS credits because I will show a loss all the time, unless I under report my mileage; which I will probably have to do. Self-employment is a cess pool of rules and really is a stupid system when you think about it. I'm not going to argue that by driving my car as much as I could would not indeed trash my percieved income (maybe, maybe not... a laborious debate)... however, I will say that, almost any small buisness (self-employed person) can show a loss every year if they desire too, and essentially then not pay taxes. At the end of the year, because the mileage rate is so high, I will show a loss but still have pocketed a significant amount of money for which I will receive no SS benefits because of their broken system. Uber needs to make these smaller markets either actually profitable, or the government needs to do a more exact job figuring out a real rate that doesn't obfuscate the actual income self-employed workers bring home in order to opt out of supporting them through the SS pension system in the future. I can probably tweek my driving more and get my per hour up on less miles, but that mileage rate will still skew my earnings for SS.
-understating deductions to overstate taxable income in order to pay the minimum into SS is a tax strategy I’ve never heard of before. Instead of worrying about that set aside some money from your tax savings to put into a Traditional or Roth IRA. This is what self employed people do. (Or any other investment that suits you.)