4 ms·
I drove for Uber part-time last year in Canada and made less than $3 an hour on paper at tax time. However, this is highly misleading simply because I was able
by aianus 9y ago
I drove for Uber part-time last year in Canada and made less than $3 an hour on paper at tax time.
However, this is highly misleading simply because I was able to deduct fixed "business expenses" that I would have spent anyways to own a car. Insurance, parking, licensing, registration, and finance interest, were all things that I would have spent anyways in the exact same amounts even if I only drove the car for personal use.
In addition, cars are considered to depreciate 30% every year by the CRA (Canadian IRS). This is obviously nonsense; cars depreciate based on kms driven and I did not drive nearly enough kms to reach 30%. So this is not a real expense either, but one I can deduct nonetheless.
So, really, I was subsidizing my expensive car ownership tax-free. The real rate after adjusting for those fake "expenses" was around minimum wage which is fair considering it's a better job than flipping burgers.
- nemo3141 9y agoI am not sure about Canada but in US you are supposed to deduct expenses for Insurance, parking, licensing, registration as a percent of miles driven for business. So 20k miles driven total with 10k for Uber and 10k for personal means only half of your car expenses is deductible for Uber income.
- aianus 9y agoYes, it's the same here. Still, since Uber wasn't doubling my insurance (it actually didn't cost anything more), deducting half my insurance etc. for Uber is not really an accurate accounting of the expenses. I bought the car because I like driving and I like having a car, and I would have bought it anyways.
- nemo3141 9y agoOh ok that makes more sense. Yes the standard mileage deduction of 54c/ mile and other deductions makes Uber profitable if done in a right market with an old car. Few years back my deduction made it seem like I was in loss and didn't have to pay any taxes.