Getting My Uber W2 Form – The Ins and Outs of Uber Driver Tax Return
Are you confused with filing your tax return as an Uber driver? Here’s an easy guide to help you prepare for tax season. Drivers of other ride-hailing platforms will also find helpful tips that may be applicable for their own tax returns.
W-2 vs 1099: Which form is for Uber drivers?
If you’re an Uber driver frantically looking for a W-2 for your tax preparation, STOP. You shouldn’t expect a W-2 form from Uber. Uber drivers are considered independent contractors. What you should be looking for is your 1099 form. Don’t confuse the W-2 to file the appropriate tax return.
What’s the difference?
Simply put, W-2 forms are for typical, salaried employees that are covered by employer benefits such as Social Security, healthcare, paid time off and leave, and overtime pay. W-2 employees get payroll tax deductions from their paychecks automatically and directly paid to the government by their employers.
1099 forms are for the self-employed or independent contractors. This kind of employment entails personal responsibility for calculating payroll taxes and paying it directly to the government. Uber drivers are hired to work under the company name ‘Uber’, so why are they regarded as independent contractors?
You’re self-employed if you likely:
- Have your own method of accomplishing tasks
- Set your own schedule or timeline
- Can have more than 1 client
- Can turn down offers or requests, work on case-to-case or project-basis
These conditions satisfy an Uber driver’s employment set-up with the company. Although it’s been debated whether Uber drivers should be treated as regular employees, they will be classified as independent contractors for the time being and for the purpose of the 2019 tax deadline.
1099 Forms for Uber Drivers
1099 forms are used to determine the amount of income you earned and the category in which your income falls under. This information will also be used in different parts of your tax return, so be sure you get your 1099 forms early to prepare for the April 17 deadline.
However, just because you received 1099 doesn’t automatically mean you owe taxes. Your income might be offset because of deductions, or some or all of it might be sheltered (depending on how that income was generated). But it’s a gentle reminder that the IRS knows about it.
Uber generates a 1099-MISC form and/or a 1099-K form to be sent to its drivers and the IRS. Technically, 1099-MISC forms are for other sources of payout such as bonuses, referrals, etc. And in the case of Uber drivers, it’s for those who earned more than $600 the previous year from their ridesharing or ride-hailing business.
The 1099-K form is only applicable to independent contractors or businesses that accept credit card payments or third-party processors like Paypal. But that is if they received over $20,000 from more than 200 individual transactions.
You can access your 1099 form on your Uber account. Log into partners.uber.com and you can find the download button to your 1099 form on the “Tax Information” tab.
If you don’t want your digital 1099, you can have it mailed to your registered address. Make sure that the registered name on your uber profile reflects your legal name as this will be the name on the form you will receive.
Tax deductions to consider
- Paypal and credit card fees you pay for every ride transaction
- Parking and toll fees
- Uber commissions or fees that are automatically charged to you
- Interest on a car loan
- Any extra insurance coverage you got for your ride-sharing business
- Cost of your business phone/s
- Actual car expenses such as gas, repairs, etc.
- Mileage run for business purposes
- Other expenses, such as water or candy that you provide for passengers
Paying Estimated Taxes
Hold up! Taxpayers that fall under the self-employed category can’t wait until the April 17 deadline for a one-time payment of taxes. You’re required to pre-pay your estimated taxes in 4 equal installments each year.
Much like filing yearly tax returns, compile your deductions, income, credits, and paid taxes. You can also use your income/liability numbers from the previous year to get an estimate of how much you’ll probably owe in taxes. Since it’s impossible to get an accurate prediction on how much you are likely to earn for the year, the IRS only imposes a modest interest penalty if you don’t pay enough estimated tax. To avoid this, you can pay 90% of your total tax due for the current year or 100% of your previous year’s taxes (110% for high-earners), whichever is amount is smaller.
Take note of the quarterly tax deadlines to avoid incurring penalties.