Harry right here. Uber and Lyft sometimes ship out 1099s in early February, so hopefully you’ve been monitoring all your mileage! But if not, we’ve teamed up with Stride Drive for a visitor publish to assist you determine how one can nonetheless declare all these misplaced miles.
Check out their new Uber Tax Calculator, which might help you narrow your taxes in half.
First of all, don’t panic! Many drivers have confronted the identical state of affairs of not utterly monitoring their enterprise miles or just not figuring out what to monitor. Sometimes new drivers don’t get the heads-up that their mileage is deductible. Often, drivers don’t maintain a mileage log for all of the miles they’re allowed to deduct for the yr.
Fortunately, rideshare drivers are in a great place when it comes to discovering additional proof. Since Uber, Lyft, and different rideshare corporations hold fairly thorough data of your exercise, rideshare drivers have entry to extra corroborating proof than most unbiased contractors.
Even although utilizing an app to monitor miles all through the complete yr is completely the easiest way to doc your mileage deduction, the excellent news is that drivers can piece collectively a mileage log based mostly on incomplete records. (Stride Drive is one of the best device for monitoring miles and bills for each rideshare and supply drivers. Plus it’s 100% free!)
According to the IRS, this consists of both a “written statement containing specific information about the element,” or “supporting evidence that is sufficient to establish the element.”
In plain English, which means if you’re filling within the blanks on an incomplete mileage log, you want to ensure your estimate matches what proof you do have.
Believe it or not, the IRS provides a number of particular examples of how to put collectively a post-facto mileage log. One instance is of a supply driver backing up a mileage deduction with the invoices from their deliveries. The invoices can be categorised as “circumstantial, rather than direct” proof of enterprise mileage. The similar goes for different unbiased contractors like actual property brokers, who can use a date guide of shopper conferences to show that that they had to drive for enterprise on sure days.
How to declare your misplaced miles
Luckily, as a rideshare or supply driver you have got some fairly detailed data of the place you’re driving and for what causes. These data can be utilized to fill within the different deductible enterprise miles that weren’t recorded by your rideshare app.
For instance, let’s assume you’re an Uber driver who began driving in March, however who hasn’t stored a mileage log for the primary half of your rideshare enterprise.
1) Start together with your journey logs
Uber will monitor your on-trip mileage for you. This consists of your mileage when you could have a passenger within the automotive, however not your mileage if you find yourself driving to the passenger, or driving between journeys to discover locations the place you’re possible to be matched with a passenger.
Your on-trip mileage serves because the minimal mileage you could deduct. It’s not an entire document of the enterprise miles that you simply truly drove, however it’ll nonetheless prevent cash at tax time.
2) Find your complete mileage
When you declare your mileage deduction on a Schedule C (or in a tax submitting software program), you’ll possible want to enter what number of miles you drove in complete through the yr, together with private and commuting miles. You want to be sure your complete mileage deduction is sensible compared to your complete miles pushed. Ideally you’d notice your odometer readings initially and finish of the yr, however you might additionally use previous upkeep receipts to determine your complete mileage (since these typically document odometer readings).
Once you discover this quantity, you’ve acquired a variety for what your precise deductible mileage is. You’ll know that your precise deductible mileage is someplace between your complete miles, and your rideshare miles.
three) Look for documentation of your different enterprise mileage
Let’s assume that you’re lacking the miles from:
- Between journeys
- When driving from house to the place you picked up your first journey
- From your final journey again residence.
Here’s the place the sleuthing begins. You’ll have to discover proof that proves you truly incurred this non-trip mileage whereas operating your rideshare enterprise. Here are a number of methods you will discover that proof:
Calculate misplaced mileage for the commute to and from house
On a given day you possibly can see the place you started your first journey or ended your final journey, and the way distant it’s from your property. It’s a tedious course of, however if you calculate the mileage between these two factors, and may doc your actual beginning and ending places, you’ll be able to calculate your deductible mileage from that info.
For instance, if you reside in Oakland however commute to San Francisco day by day to drive for Uber, calculate what number of miles you drove to and from the town and embrace these in your deduction.
Calculate misplaced mileage between passengers
You even have data on the place one journey ended, and the place the subsequent started. You can calculate the mileage that you simply incurred between dropping off one passenger and choosing up one other. Just ensure to embrace nice notes on every drive that you simply add to your mileage log, and hold monitor of all your supporting paperwork like Uber journey logs.
Want to double verify your estimates?
Find recordings of your odometer readings all year long. This helps corroborate your story that your estimated mileage is constant together with your automotive’s complete utilization all year long. Maintenance receipts are nice sources for odometer readings.
four) Find your driving patterns
The investigative work described above seems like a problem, proper? Don’t fear, you’ll be able to take the standard mileage you drive in every week or month and apply it to a bigger pattern of time.
If you discover your complete deductible mileage for one month, and may show that you simply drove about the identical quantity every month, then you possibly can apply your typical month-to-month mileage to the remainder of the yr.
For instance, let’s say you have been solely monitoring your Uber mileage for November and December of 2016. If you’ll be able to present that your Uber revenue and journey quantity was the identical for all 12 months of the yr, and you understand that you simply drove the identical variety of miles (or inside a small vary), then you can use your Uber revenue and journey logs as proof that your deductible mileage was constant all year long.
One observe: the objective of this train isn’t to re-create the mileage log that you must have stored within the first place. Unfortunately, it’s too late to have an entire mileage log of your enterprise driving for the yr, so don’t begin making stuff up so as to have an entire log.
Rather, you’re wanting to show your common with as a lot proof as you’ll be able to. For rideshare drivers, you’ve received loads of built-in proof–in any case, you didn’t obtain paychecks from Uber for no cause. Just the truth that you acquired fare cash from Uber proves that you simply did a minimum of some driving. If you begin with the proof that you simply do have, you’ll find a way to construct a narrative round your rideshare exercise.
Do you could have any questions on mileage monitoring in 2016? How did you monitor your mileage this yr?
-Harry @ RSG
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I am Harry, the proprietor and founding father of The Rideshare Guy Blog and Podcast. I used to be a full-time engineer however now I am a rideshare blogger! I write about my expertise driving for Uber, Lyft, and different providers and my objective is to assist drivers earn extra money by working smarter, not more durable.