If you missed our last post on the tax considerations of being a ride-share driver, check it out here for more information. Here’s a quick summary if you missed it. First, if you work for a company like Uber or Lyft, you are not a traditional employee, which means that your taxes are going to be slightly more complicated than if you were receiving a paycheck with taxes already deducted. Second, you need to pay taxes on all income you receive, including tips through credit or cash.
Once you’ve calculated your gross income, including tips and payments, the number might seem quite a bit larger than what you actually made. When Uber reports your earnings to the IRS, they report the gross amount that they paid you, including tolls, Uber fees, and device subscriptions. However, the fees that drivers pay to the company are actually deductible, so it’s important to deduct them to avoid paying more tax than you owe. Keep in mind that you will also be responsible for self-employment taxes.Read More