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My understanding is, yes, you can deduct the IRS per-mile (54 cents per mile driven) as a business expense, which will reduce the amount of taxes paid. At least
by presto8 10y ago
My understanding is, yes, you can deduct the IRS per-mile (54 cents per mile driven) as a business expense, which will reduce the amount of taxes paid. At least one Uber driver I rode with told me he did this. In fact, not doing it would be missing out on a huge tax benefit!
Example 10-mile trip: 1.25 base fare + (10 miles * 1.15 per mile) = 12.75 * 80% (driver's share) = $10.20 revenue - 5.40 deduction for mileage = $4.80 revenue reported. For somebody in 20% tax bracket, this could yield $1.08 in savings.
Although using the per-mile deduction negates the ability to deduct line item expenses, such as gas, car washes, etc.
- imgabe 10y agoI was thinking more like depreciating the value of your car according to whatever depreciation schedule the IRS allows, prorated by the proportion of the miles you drive for Uber. Something like - your car cost $30,000 and depreciates over 10 years, so $3,000 per year (just making up numbers, no idea if/how the IRS depreciates a car). So you'd have a $3,000 loss in the value of the car per year until it drops to 0. If the car was used 40% of the time for business (driving for Uber) you could claim 40% of the depreciation - $1200. I guess then you'd have to separately itemize all the gas, maintenance, etc. But if you're actually losing money on the Uber-driving endeavor when that is factored in, whatever revenue you get should be tax-free. Of course, I suppose that only works if you're an independent contractor / business, and Uber drivers fought so hard to get treated as employees instead. Oh well. Employees get screwed when it comes to taxes.