The City of Richmond was excited to get Uber last year! Not only did it mean there was a more convenient option for transportation, it meant a possible second income stream for Richmonders looking to pick up some extra cash.
As an Uber driver, you are not an employee of the company, you are a self-employed, independent contractor. This means that Uber does not take taxes out of your income throughout the year. Therefore you will need to pay taxes, on the income earned as an Uber driver, when you file your personal tax return. If you (and/or your spouse) had income from another job, you may have withheld enough to cover the amount of taxes you owe, from the income earned, as an Uber driver. If that is not the case, hopefully, you’ve been putting money away in a savings account so that you don’t have to pay a big balance due when you file your tax returns.
As a self-employed taxpayer, you will receive Form 1099-K and 1099-MISC from Uber – these forms are necessary in order to file your taxes. Once you have your forms, you will need to decide whether its more beneficial to use the standard mileage rate or actual auto expenses (includes depreciation) to calculate your automobile deductions. You cannot do both.
Miscellaneous Additional items that can be claimed as expenses include:
- Car washes
- Cell phone
- Record keeping items such as a log book/ink pens
- Items purchased for the car such as small trash bags, hand sanitizer, Kleenex, disposable wipes, air fresheners, etc.
- Items purchased for passengers such as water, gum, snacks, etc.
- Car maintenance such as window cleaner, paper towels, cleaning products, etc.
If you drove for Uber last year, come see us! We can help you determine the best strategy for filing so that you pay the least amount of taxes.