At the bottom, you will see a video on how to enter a Rideshare Schedule C in Taxslayer. Hope this helps!
Whether you are a driver or a tax preparer, the information on this page will help you.
See below for:
One resource you may find very helpful (and where the first two attachments below came from) is http://www.ridesharetaxhelp.com/ Ridesharetaxhelp was created by the Center on Budget and Policy Priorities, part of the Get It Back Campaign.
On it's site there is a lot of great information to share with your clients (direct them to the site) and for volunteers. There are also links to these great handouts which I have attached:
Expenses Tracker tool below
Here’s the 411 on who can deduct car expenses on their tax returns.Employees who use their car for work can no longer take an employee business expense deduction as part of their miscellaneous itemized deductions reported on Schedule A. Employees can’t deduct this cost even if their employer doesn’t reimburse the employee for using their own car. This is for tax years after December 2017. The Tax Cuts and Jobs Act suspended miscellaneous itemized deductions subject to the 2% floor.
However, certain taxpayers may still deduct unreimbursed employee travel expenses, this includes Armed Forces reservists, qualified performing artists, and fee-basis state or local government officials.
Click link above to learn more.
If you are a VITA site, please remember that we cannot process tax returns that have Self-employment income that run at a loss. Keep this in mind, especially for Tax year 2019, as the business mileage rate increased to $0.58 per mile.
Clients need to keep track of their business miles for the year. There are many ways to do this from log books, notebooks, and yes, there is even an app for that. It is their responsibility, they may get asked to produce records of expenses for the IRS--so they need to document the miles and keep it for at least 4 years. Business miles will be their biggest expense write-off so its worth the effort!
Remember, we only use standard mileage (not actual expenses at VITA--which is a really good deal considering the amount each mile is worth) It's also a lot easier than keeping receipts and logs on repairs and gas purchases!
Per IRS If you use the standard mileage rate, you can’t deduct depreciation, lease payments, maintenance and repairs, gasoline (including gasoline taxes), oil, insurance, or vehicle registration fees. Also, you can't deduct general car washes (as per a decision made last Spring by IRS--extra washes outside of your norm may be allowed if you can justify its needed for your job but its a touchy topic)
So besides business miles, what are some other expenses clients may be able to claim? Tolls, parking fees (not tickets), things bought for passengers like water, snacks, and magazines. Or items to make their car more welcoming like air fresheners. Subscriptions to an app or log books purchased to track mileage, pens, etc.
The client should have his Uber/Lyft statments for the year printed or pulled up to show you. If online--print out or write the information down for you to use and the Quality Review to check.
Clients MUST claim all income earned EVEN IF a 1099-Misc is not issued. Remember, 1099-Misc only get issued when the client earns over $600, if they made less they still need to report it.
Entering Rideshare Information in Taxslayer
If the driver received a 1099-Misc
Schedule C Entry
Unless they have created an actual Business Name, have business tax #, and business address, leave those fields blank
Business Code: 485300 Taxi, limousine, & ridesharing service (For Uber Eats, GrubHub or other Food and grocery delivery service I would use 492000 Couriers & messengers)
On Line 1 Gross receipts or sales (including income reported on Form 1099-K) enter
1099-K line 1a plus ALL other income NOT reported on 1099-MISC
General Expenses Tab:
Under Commission & Fees put the total of all fees & subscriptions charged by Uber/Lyft (See orange boxes in document on right)
You can enter supplies and other expenses if they fit into the categories on this page, or you can go to Other Expenses Tab and list them there (just be careful not to duplicate any entries)
Car & Truck Expense Tab: This is where you enter the mileage
This video is helpful for Rideshare drivers--created by The Rideshare Guy. It goes over mileage, the 1099-K, 1099-Misc, and other information
IRS: When are Transportation Expenses Deductible?
Video: Modeling entering Rideshare Info into Taxslayer for a client
You can contact me at email@example.com
Please note: I, Mary Meador, AM NOT a certified accountant or tax law expert. I volunteer with VITA providing free tax preparation for individuals and families whose income is less than $66,000 a year. We deal with simple returns at our sites. I cannot guarantee the accuracy of all the information on this site as tax laws change and I may not have a clear understanding of complicated issues. I am trying to provide basic tax preparation information for our volunteers to get started--remember Publication 4012 is your go-to resource for questions, as well as irs.gov and Publication 17.