Did you know that if you drive for Uber or Lyft you are considered as having self-employment? You can deduct some of your fees and expenses on your tax return.
First, you will need to contact the company that you work for and request a Form 1099-MISC. This will show how much the company paid you during the tax year. Normally, these forms are given to individuals who earned more than $600.
Next, you will need to know what you can deduct when you are filing your taxes. Well here are some deductions to consider and keep track of:
Car Expenses--You can either deduct the actual expenses or choose to take the standard mileage rate deduction. The actual expenses are a breakdown of the money spent on vehicle registration, license, lease payments, depreciation, gas, oil, repairs, insurance, tires, etc. If you choose the standard mileage rate deduction, these expenses can not be considered and you will be paid for the rate per mile for the vehicle driven.
Parking
Tolls
Bank Fees
Car Cleaning and Car Washes--Can only be used if you use the actual expense deduction. Deep cleans and cleaning supplies used for business purposes can be claimed with the standard mileage rate deduction.
Cellphone Data--Only the portion used for business.
Dashboard Camera--Can be deducted or depreciated as long as it is used only for business.
Health Insurance Premiums--Can only be deducted if you claim a profit and are not eligible for employer-based healthcare.
Inspections and Background Checks--If these items are required by your rideshare company, it qualifies as a necessary business expense.
Roadside Assistance--These programs can be deducted if you used them while driving for the rideshare company.
Self-employment Taxes--You can deduct one half of the amount paid as a deduction.
Snacks and Beverages--If these were purchased exclusively for rideshare passengers, then they can be deducted.
As with any self employment business, you should always keep track of your expenses. I would advise using an expense tracking app to make things easier for you when it is time to claim these expenses on your taxes.
