Uber drivers are considered as self-employed “partners” who don’t directly work under Uber. Another term for this is “independent contractor”.
Unlike regular Uber employees, you are not subject to the same pre-tax deductions. Not getting a regular payroll also means you WILL NOT be receiving a W2 form from your employer.
Instead, you report your income from your ride-sharing business on your personal tax return using IRS form 1040. As an Uber partner, you are eligible for plenty of tax deductions.
Uber Tax Forms To Use
Use 1099-K forms to report your Uber transactions. This form includes all transactions that used a card payment or a third party network to pay for the ride.
This reports all income you received through credit card, debit card, or P
You will typically get this if you received over $20,000 or over 200 payments using card or
Report all cash payments you received and other incentives of some sort from Uber on this form.
If the IRS did not send you a 1099-MISC for a certain Uber cash transaction, you will still have to report this transaction on your own tax returns.
Use Schedule C to report your income and expenses under the “self-employed” category.
After filling out your Schedule C form, use Schedule SE to report your actual net profit and determine how much income is taxable from all your self-employment earnings.
Report your income taxes together with your personal taxes using IRS form 1040.
Uber will send the appropriate 1099 forms to you and to the IRS by January 31. You should receive this via mail if you did not consent Uber to send you an electronic copy.
Uber Tax Information
There are 2 important information on the Uber 1099 forms:
- the amount you made within the year (including all the fees deducted by Uber)
- the actual miles you drove with the app
Collect your 1099 forms before starting tax preparation. Start with the tax summary that Uber provides you.
How to file Uber taxes
- First, check your receipts and records to list down ALL expenses you incurred during the year for the operation and improvement of your ride-sharing business. You can use this to maximize your tax deductions and this will be discussed further in the next section.
- Use your 1099 forms and list of expenses to fill out Schedule C and Schedule SE. Report your business income or business loss on your Schedule SE. You will also use this information on line 12 of your IRS 1040 form.
- Next, use the tax information you collected to calculate your actual profits. You just subtract the deducted Uber fees and all your business expenses from the total amount you made.
- Lastly, fill out your form 1040 and use the information from your collected forms to complete your tax return. Take note that you can’t wait for the annual tax deadline until you file and pay your taxes; self-employed individuals need to pay estimated taxes (i think we have an article we can link here, not yet published)
- IMPORTANT NOTE: Maximize your tax returns with this BIG list of Uber tax deductions and get the biggest tax write-off possible.
Don’t Forget Your Quarterly Estimated Taxes
Hold up! You’re required to pre-pay your estimated taxes in 4 equal installments each year.
Remember that taxpayers that fall under the self-employed category can’t wait until the April 17 deadline for a one-time payment of taxes.
Much like filing yearly tax returns, compile your deductions, income, credits, and paid taxes.
- Estimate how much you will probably owe. Use your income/liability numbers from the previous year when you calculate your pre-tax estimate. Don’t worry if you don’t get an accurate prediction of your annual income. The IRS only imposes a modest interest penalty if you don’t pay enough estimated tax.
- To avoid incurring penalties, the safest way is: pay 90% of your total tax due for the current year or 100% of your previous year’s taxes, whichever is smaller. For high-earners, calculate 110% of last year’s tax.
Take note of the quarterly tax deadlines to avoid incurring late fees.
Another simple solution to all your Uber tax dilemmas
If you find this guide helpful but you still need extra help, consider using a reliable tax software. There are many tax preparation software out there that can help you do the job.
Locustax is one of the easiest to use that won’t break the bank. You don’t need to be tech-savvy to know how to use the software, and you’ll definitely be spending a lot less as opposed to hiring your own tax professional.