How Does Uber Work With Taxes??
Last Updated on July 22, 2021 by Rideshare Community Support
Driver Question: ★How Does Uber Work With Taxes?|Uber Driver Deductible Expenses★
Trying to figure out how Uber taxes work since drivers are independent business owners vs employees can be a bit tricky. Especially, if this is your first time working independently. Therefore we are happy to break this down for you.
How Uber Taxes Work :: Uber do not withhold or deduct any taxes, meaning partner drivers are entirely responsible for their own tax obligations. If you qualify, Uber will provide you with a 1099-K, 1099-NEC, and/or 1099-MISC form. Usually, this tax document should be available for you to download in your Driver Dashboard no later than January 31 of that tax year. If you opted for Uber to send you a physical copy of your tax forms, then you likely won’t receive them in the mail until after February of that particular year.
Driver Tax Form :: So, lets say if you earned $600 or more on the Uber system in the past calendar year, Uber will issue you a 1099 form based on the tax information you entered in http://vault.uber.com. But if you did not make at least that much, instead of a tax form to file your taxes, you will receive a detailed Tax Summary which can be located on your Driver Dashboard via the Driver app. The Tax Summary document will give you a breakdown of your annual earnings.
Remember, it is your responsibility to file your taxes quarterly or at the end of the year. You should seek the advice of a tax professional if you questions on how to report this income.
Uber Driver Deductible Expenses :: Some self-employment deductions that may be available to you are:
Mileage
Uber phone rental fee
Deduct your monthly health insurance premium
If you brought any refreshments for your riders like candy, bottled water, etc
Any Uber specific clothing – like T-Shirt
Uber signs or printing of referral/business cards
Commercial license fees
License and registration fees
Cleaning or detailing
Parking fees
Gasoline
Tolls
Your tax consultant will be able to help you with determining which of these expenses you are able to deduct. Remember to keep all receipts. Your tax preparer might request copies.
Should you pay quarterly or yearly taxes?
Paying taxes on your Uber rideshare business is different from paying taxes as an employee. If Uber were your employer, they would be required to withhold taxes from your wages, and then you file a tax return annually. Whether you pay your taxes quarterly or annually is totally up to you.
The IRS likes small business owners like yourself to make estimated quarterly payments if you expect to owe tax of $1000 or more. When trying to figure out how much you need to pay the IRS, that will depend on your tax bracket and other credits and deductions.
Just because you made quarterly payments does not mean you do not have to file annually. You still need to file an annual federal income tax return. A couple of things to keep in mind is that you’d owe additional tax if you didn’t pay the IRS enough money. If you paid the IRS too much, you usually would get a refund when you file your yearly return.
You can send the IRS your estimated tax payments with Form 1040-ES by mail. Or, you can pay by phone, online, or download the mobile app IRS2Go.
Avoid Tax Scams
Therefore be weary of anyone claiming to be able to get your refund check back sooner. Some companies may allow you to take out a tax loan and they deduct their money plus interest out of your refund. But you shouldn’t do this unless you need the money really bad. Because the interest on most of those loans are crazy expensive.
Also be weary of anyone who are charging you an insane amount of money just to prepare your taxes. Average cost is between $100-$300 depending on where you live.
Don’t let anyone tell you that because you are an Uber driver your tax situation is unique and therefore they must charge you more. Not true in most cases. Run.
Go to people or companies who been in business for a while and has good reviews. We recommend you avoid those pop-up tax companies that all of a sudden popped up in your city out of thin air. Not all are bad, but just make sure you do your research before going to them.
Make sure you get a copy of your return so you can see exactly how much you are getting back. Look over your documents to make sure you don’t see any shadiness going on. Check the status of your own refund at irs.gov/refunds after Jan 23rd or after whatever date it has been submitted.
Please let Uber know if you have any questions or concerns at help.uber.com.