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As a rideshare or delivery driver, you are an independent contractor. You aren’t employed by Lyft or Uber, but rather you are contracted by them. How does this affect you when you file your taxes in April? It means that you are self-employed, and will need to file accordingly. The same concept also applies if you drive for other on-demand delivery services like Postmates, DoorDash , Instacart and Shipt as well.

If you’ve never been self-employed before, then this can be a somewhat daunting task, as it requires you to file in a completely different way than you have in the past. Specifically, it means you’ll need to keep track of certain things in order to receive some money-saving tax deductions.

If your main goal in tracking mileage is easier tax return filing, Hurdlr was built with this purpose in mind. Not only does it auto-track mileage and expenses, but it also offers real-time views of earnings and potential tax deductions. Gain insights to real-time profit and loss reports.

It enables you to always know what taxes you owe, and when you owe them, offering peace of mind about finances with little mental effort, so you can focus on other things, like offering the best Uber or Lyft ride to customers. Click here to download Hurdlr on iOS and Android.

You can also download the Gridwise app, where you’ll be able to:

  • Effortlessly track all of your rideshare and delivery miles to maximize your tax deduction
  • Save time by receiving alerts when passengers are arriving at your local airport and check the queue length from anywhere
  • See how your earnings break down across rideshare and delivery services so you know where to focus more of your time on the road
  • Compare your earnings to other drivers in your area
  • Get alerts about local traffic, weather, and large events going on in your city
  • Easily switch between rideshare and delivery apps from anywhere on your phone (Android only)

Drivers who use Gridwise report increased earnings by up to 39% and save thousands on their tax bills.

Click here to download the Gridwise app today.

To make sure you are completely prepared when tax season rolls around, we’ve assembled a list of important tax deductions, as well as provided the place on the form to record each deduction.

Everything You Need To Know About Tax Deductions As An Uber Driver

Everything You Need To Know About Tax Deductions As An Uber Driver

What You Need to Know

Understand the Forms – What tax form do Uber and Lyft drivers use?

You will receive a 1099-K form from Uber or Lyft, detailing your earnings with the company. To file for taxes on those earnings, you’ll fill out a Schedule C (Form 1040) to report those earnings as business income.

If you earn less than $400 in a year, you do not have to pay self-employment tax, but you do still need to report your earnings using a Schedule C form. This is where the IRS will be looking for your reported income, and filing it out as miscellaneous income could send up a red flag for them.

Keep Records

If you don’t want to look like a deer caught in the headlights come tax season, you need to keep detailed records. In order to claim a deduction, you need proof you are legally allowed to claim that deduction.

How you keep records will depend on how you intend to file, but it’s safest to just go ahead and plan on keeping receipts and keeping a detailed account of everything you pay for as a rideshare driver.

There are many apps and software programs that make it easy for you to do this, and you can check out a full list of those here. With these you can easily snap pictures of receipts, quickly add expenses, and automatically log miles with little effort.

File for Standard Mileage OR Actual Expenses. NOT Both.

One mistake to avoid is accidentally double deducting. This can happen if you don’t understand the two different ways you can file for your vehicle expenses: standard mileage and actual expenses.

Standard Mileage refers to the national rate you are allowed to claim per mile you drive for your business. In 2017, that rate is 53.5 cents per mile. When you claim this amount, it is intended to cover all of the expenses incurred while you drive, including gas, maintenance, and depreciation.

Actual Expenses are all of the separate expenses covered by the standard mileage reimbursement. So, if you intend to file for actual expenses, you will keep track of all of the costs incurred for each separate vehicle expense. Then you will record the total cost for that year of each individual category (gas, car payments, insurance, registration, oil changes, etc.). A percentage of these expenses will be reimbursed.

As a rule, filing for a standard mileage reimbursement is not only simpler, but ends up being a larger number on your tax return than if you had filed for each category separately. Still, some prefer to do it this way, and we’ll detail all of those categories below.

Everything You Need To Know About Tax Deductions As An Uber Driver