Making earnings through Uber or Lyft Income is quite exciting and hardest thing to assess personal taxes. Determining taxes of Uber and Lyft is much confusing task, because you are not an employee but individual contractor. Uber/Lift provides you with the tax summary where you can see your ride fares, tips and cancellation fees is summed up, so you might think that the whole amount is reportable as income.
The whole amount reported on tax summery should not be considered for taxation, instead there should be a subtraction between the tips, ride fares and cancellation fees. So, a prefect tax professionals assistance is fully required to figure out the exact taxes.
The income and tax documents you could get from Uber/Lyft are 1099S/1099-K/1099-MISC, or you would get any of the above-mentioned documents based on the amount of income you earn. This article would give you an idea about considering an amount towards income and expenses, so even after going through this article you would still need an assistance in paying your personal and self-employment taxes, so assistance is here!
Why Uber or Lyft Issue 1099S/1099-K/1099-MISC, Instead of Form W2?
You being an individual driver you are considered as an individual contractor, and your income is entirely based on number of trips you make without fixed working hours, for that matter Uber/Lyft would issue any of these forms 1099S/1099-K/1099-MISC based on the earnings you make.
Why Will I Receive Form 1099-K?
You would receive form 1099-K if you have earned over $20,000 or made 200 rides.
Why Would I Receive Form 1099-MISC?
you would receive 1099-MISC as a tax source document, if you made an income between $600 to $20,000,
What Is Tax Summary?
Tax summary consist of your form 1099-K or 1099-MISC with income details Like: uber rides fares, split fare, uber eats fare, booking fee, airport fee, tips and tolls.
When Will I Receive 1099S/1099-K/1099-MISC Form Uber/Lyft?
You should be receiving 1099S/1099-K/1099-MISC during the year or first month of the following tax year.
I Received An Income, But Did Not Receive Any Of The 1099S/1099-K/1099-MISC, Should I Still File Taxes Return?
Though you have received income without the tax form from the payer, still you need to report your income and file the tax returns, because IRS and State might have been reported about your income by the payer.
What Types Of Miles Can Be Claimed On Uber or Lyft Income?
Miles driven to find next ride
Miles driven to reach a point location to get another trip
Can I Claim Both Actual Car Expenses & Standard Mileage As Deduction?
Due to typical and complex tax assessment, either you claim car expenses or standard mileage as deduction but cannot claim both.
What Are Actual Car Expenses?
The actual car expenses are of the car used for business like: parking fees, car maintenance, car insurance premiums, car depreciate value etc.
What Are The Deductions Claimed Under Standard Mileage Rate?
The deductions claimed under standard mileage rate are Depreciation of a business car, lease payments, gasoline, vehicle registration fees, repairs, militancy, oil, tire changes, and car washes etc.
What Are The Business Expenses Claimed As Deduction?
The expenses of cell phone bills, accounting software, water bottles and snacks, airport fees, floor mats, roadside assistance plans, businesses and licenses, first aid kit, tire inflator, tolls etc., can be claimed as deduction of business expenses.
Can I Claim Some Of My Personal Expenses As Business Expenses On The Tax Returns?
IRS and State Income Tax Departments will not allow you to claim any personal expenses, except qualified business expenses on your tax return.
What Types Of Forms Should I Use To Claim Business Expenses?
Being an individual contractor, you need to use form schedule C to claim business expenses and form 1040 to file income tax returns.
Do I Have To Pay Self-Employment Taxes In Addition To Income Taxes?
You need to file self-employment taxes along with your income tax return, if your business income is over $400
I Am a Non-Resident Of The United States With Self-Employment Income, Do I Still Have To Pay Self-Employment Taxes?
Yes! you need to file taxes though you are a non-resident of the United States.
I Have Multiple Businesses; Do I Have To Pay Self-Employment Taxes On My Both Business Income?
In case of multiple business income, you need to combine your entire businesses income and as per the standard calculation pay your self-employment taxes.
I & My Spouse Both Have Self-Employment Income, Can We Use One Form To Pay our self-employment taxes?
When both of you have a separate business income, each of you should file separate tax form to pay self-employment taxes.
I Have Been Receiving Self-Employment Income, So When Should I Pay Taxes.
Though you have received self-employment income periodically, you should pay your estimated taxes in four installments, and ensure that you should have paid your 90% of your taxes before December 31, if not you should pay underpayment penalty.
Is There A Due Date To Pay Income Taxes?
Due date to pay taxes is April 15th of every year and the date can be extended in case if 15th falling in holiday, ensure that you are filing your tax returns before the due and paying your taxes as well, filing tax returns after the due date will lead to penalty.
I Am Waiting For My Tax Documents; Can I File My Tax Returns After The Tax Due Date?
IRS grants extension of time to file tax returns up to 6 months, the extended tax filing due date is October 15th. Your extension of filing tax returns does not grant you to pay your taxes later, you should pay at least 90% of your entire tax payment on or before April 15th to avoid late payment penalties.
How Do I File My Tax Returns?
Filing tax returns with uber/lift income or any other self-employment income is quite typical, because you need to be fully aware of your deductions allowed by the IRS. If you have claimed personal/ineligible expenses without proper bills or receipts, IRS or State Income Tax Departments would send enquiry/audit/penalty notice.
The tax authorities follow standard technological procedure for checking the filed tax returns, to ensure that the filed tax returns are accurate and appropriate, if any tax return found to be having errors or incorrect calculation, then positively you would receive audit/notice letter from the tax authorities.
Can I Get Help In Filing My Tax Returns Perfectly?
Our tax experts will help you in claiming all your eligible expenses on your tax return to increase your tax refund, and also will help you with complete audit support on your already filed tax returns. There are many other tax services you can get throughout the year without any cost.
You can get our value added tax services while being at home and even according to your convenient time, so get much information about our free services on our website www.crescenttaxfiling.com or give us a call.