(ThePennyWatcher.com) – It’s an interesting question in today’s modern gig economy, especially for all those ride share drivers.
How to file the income generated, when, and what benefits you may have?
Taxes for Uber and Lyft drivers
Whether you’re driving people around for Uber or Lyft, you’re essentially your own boss. But with that freedom comes a bit of a learning curve when it comes to taxes.
You will not file as a W2 employer which most people are used to. You will be considered an independent contractor and need to handle the specifics on your own.
A few nice benefits is being able to deduct all of the miles you drive for example. Don’t over complicate it, you will be just fine if you keep an organized log along the way.
Forms Needed As An Independent Contractor
What forms do you need? Let’s take a look. These will be for Uber, Door Dash, GrubHub, etc.
Form 1040 is the main form for individual income tax returns. You’ll also need to file a Schedule C, which outlines your self-employment income and expenses.
Finally, don’t forget about the Schedule SE, which calculates self-employment taxes.
But if it’s easier to think about a different way, just save 20-30% of your earnings aside in a different account just for taxes, or you can pay them quarterly.
Applications like Quickbooks keep track of this for you perfectly.
Breaking Down Deductions
One deduction you can claim as a ride-share driver is mileage. This includes all the miles you drive while on the clock, whether you have a passenger or not.
You can also deduct expenses related to car maintenance, like oil changes and tire replacements.
And don’t forget about any tolls or parking fees you’ve had to pay while working. By taking advantage of these deductions, you can keep more money in your pocket while enjoying the flexibility and freedom of thriving in this gig.
Enjoy the hustle economy, and keep it up. More money equals more freedom to do all of the things we want, be it with family or ourselves.
Get out there and get after it!
