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If you've heard how much Uber drivers make and decided to up your side hustle game by driving for Uber, you'll also want to look into the easiest way to pay your taxes as an independent contractor.
Even if you've previously reported self-employment revenue, ridesharing is a distinct business with its own set of problems and opportunities.
However, paying your taxes to the IRS, is easy as long as your have the right tools.
Everyone working as an Uber driver either as a side hustle or full-time job should know where they stand, taxwise.
In the following sections, we'll provide some simple tips to make sure you stay on top of your taxes as an Uber driver.
What Is A 1099?
A 1099 is a tax document that is used to record various sorts of non-employment income to the IRS. It takes care of matters relating to investment, royalties, rentals, and non-employee work.
It is a series of documents referred to as ‘’information returns’’ by the Internal Revenue Service.
1099 forms are often used to report supplemental income.
This includes sources dividends, interest, payments from the government, and much more. The 1099 form is due at the beginning of every year as it contains the report from the preceding year.
The form 1099 reflects the amount due for Uber Driver tax.
Types of Forms: 1099
There are different types of 1099 forms, depending on the income. The types of these forms are listed and described below:
- 1099-A: Covers loan-related matters.
- 1099-B: Covers proceeds from stock or service exchanges via bartering.
- 1099-C: It reports debt cancellation of $ 600 and above.
- 1099-DIV: It is used to report dividends and other earnings from financial institutions.
- 1099-NEC: This is used to report miscellaneous payments during the year.
How Do 1099s Differ From Other Tax Forms?
1099s are used to report a taxpayer's non-employment income.
They are also used to report cash dividends received for stock ownership or interest generated from a bank account. Other tax forms, such as W-2s, show the amount of taxes deducted from your paycheck for the year.
Independent contractors, including Uber drivers, receive 1099s to report their earnings to the IRS. Because they are self-employed, they fall under a specific reporting status.
When a company has workers it designates as employees, W-2 forms must be used to report wages paid. Any employee (rather than a contractor, for example) must get a W-2 form, regardless of how little work is done or the rate of pay, including wages and bonuses.
Why You Need To Pay Taxes For Uber
Uber drivers are termed independent contractors and therefore are required to accurately report their income. Drivers need to pay taxes for because the following reasons:
Uber drivers, unlike employees, do not have their taxes withheld by Uber. They are their own boss and therefore are expected to file the necessary tax returns.
1099-NEC forms are given to Uber partners (drivers) to report income from referrals along with other related bonuses.
What Tax Breaks Are Available For Uber Drivers
Uber tax breaks are deductions made from the income earned at the time of tax remittance. These help to cover business costs. There are various tax deductions available to Uber drivers, whether that work is full-time or is a side hustle. Both categories are taxed and can also qualify for the deductions provided.
Some of the tax deductions available to Uber Drivers include:
- Mileage Deduction
With the use of mileage apps, Uber drivers can accurately track the mileage covered to claim the due mileage benefits accrued for the distance covered.
This can serve as compensation for the wear and tear on Uber drivers' vehicles.
- Snacks
There are categories of snacks that are deductible, especially if they were consumed during working or driving hours and it can be proved that they were necessary and ordinary.
Other deductions that an Uber driver can lay claim to are:
- Mobile phone bills
- Roadside assistance
- Tolls on highways, freeways, and bridges
- Office supplies
- Flashlights and flares
- Any other expenses incurred as a result of operating the vehicle.
If You Drive For Uber And Lyft, What Do You Need To Do?
There are things expected from everyone who agrees to be an Uber or Lyft driver. This important exercise will not only help to keep you and your passengers safe but will also help you to earn a high rating.
The list of obligations of drivers for Uber and Lyft includes but is not limited to:
Dash Cam
This is a safety tip that keeps visual and audio records of all activities that transpire between the driver and passenger. It also captures footage and can serve as defensive evidence in the case of wrongful accusations.
Mount Your Cell Phone
Drivers are not allowed to operate cell phones while on the road, yet a phone is needed to locate passenger pickup and drop-off points. It is therefore essential that a hands-free Smartphone be mounted for easy visibility, access and operation.
This is important for the safety of both the driver and passengers.
Other expectations from Uber and Lyft drivers are:
Smartphone charging block
Cleaning towels
Covid-related protections and precautions
Air fresheners
Vomit bags
Sanitary wipes
First aid kit
Spare tire
What Is The Best Place To File Taxes?
Several applications can be used to hasten the process of filing task returns. Some of these programs also help maximize claimed benefits and refunds.
Our recommended filing software is TurboTax.
As a Uber driver, you can access TurboTax filling special offers on your driver dashboard.
TurboTax is known for its accuracy, detailed guidance for tax filing. It also guarantees maximum rideshare deductions, allowing you to keep more of the money you earn as a driver.
Other places to file your tax are TaxAct, Credit Karma Tax, H$R Block, and TaxSlayer.
How To File Uber Driver Tax When Form 1099 Is Not Issued
Usually, 1099s are sent by Lyft and Uber to reflect the total income paid to you from the previous year as well as how many deductions were made.
Where you receive over $600 in other payments, the 1099- NEC is issued and you will also receive the 1099-K if you exceed $20,000 in income in the course of making 200 or more trips (deliveries or rides).
Sometimes when the income is below $20,000, the 1099 form may not be issued and therefore a manual approach will be required to get the information.
Here is what to do when form 1099 is not issued
- Sign in to your return
- Select Federal
- Select ‘’wages & income’’
- Select ''self-employment''
- Fill in all the necessary information
Uber Tax Calculator
The Uber tax calculator is used to calculate what is due for payment by the end of the tax year. The tax rate for self-employment is 15.3% on the net income and it covers 2.9$ to Medicare and 12.4% to Social Security.
The net income is the total gross income minus total expenses incurred.
Questions and Answers on Uber 1099
How to file Uber Eats taxes?
As an Uber Eats driver, you are considered an independent contractor and must file taxes accordingly. You will need to keep track of your earnings, expenses, and deductions throughout the year. You can use accounting software, spreadsheets, or a mileage tracking app to keep track of your finances. When it's time to file your taxes, you can use a tax software like TurboTax or hire a tax professional to help you file.
Do Uber drivers get tax refunds?
Whether or not you get a tax refund as an Uber driver depends on your individual tax situation. If you have overpaid on your taxes throughout the year, you may be eligible for a tax refund. However, if you have underpaid your taxes, you may owe money to the IRS.
When does Uber send 1099?
Uber is required to send you a 1099 form if you have earned at least $600 in a calendar year. The 1099 form should be sent to you by January 31st of the following year.
Uber tax calculator
There are several Uber tax calculators available online that can help you estimate your tax liability as an Uber driver. These calculators take into account your earnings, expenses, and deductions to give you an estimate of how much you may owe in taxes.
Uber 1099 form
The 1099 form is a tax form that is used to report income earned by independent contractors. As an Uber driver, you will receive a 1099 form if you have earned at least $600 in a calendar year. The 1099 form will report your earnings, as well as any expenses that you can deduct on your taxes.
How to file Uber Eats taxes on TurboTax?
You can file your Uber Eats taxes on TurboTax by following these steps:
- Log in to your TurboTax account and select "Take me to my return."
- Select "Federal Taxes" and then "Wages & Income."
- Under "1099-MISC and Other Common Income," select "Start" next to "1099-K, Miscellaneous Income."
- Enter the information from your 1099-K form, including your name, address, and earnings.
- Enter any expenses or deductions that you are eligible for.
- Review your return and file your taxes.
Do I have to file taxes for Uber Eats?
If you have earned at least $400 as an Uber Eats driver, you are required to file taxes. You will need to report your earnings on your tax return and pay any taxes that you owe.
Uber 1099-NEC
The 1099-NEC is a tax form that is used to report non-employee compensation. Uber may send you a 1099-NEC form if they have paid you at least $600 in non-employee compensation in a calendar year. This form will report your earnings, but it will not include any expenses or deductions that you can claim on your taxes.
How to file Uber Eats taxes without 1099?
If you have earned income from Uber Eats but did not receive a 1099 form, you can still file your taxes. The first step is to determine how much you earned from Uber Eats during the tax year. You can find this information in the earnings section of your Uber driver account. If you cannot access your earnings statement, you can request it from Uber's support team.
Once you have your earnings information, you can report it on your tax return as self-employment income. You will need to file a Schedule C (Form 1040) with your tax return to report your business income and expenses. If you had any expenses related to your Uber Eats work, such as mileage or food costs, you can deduct those expenses from your income to reduce your tax liability.
It's important to keep accurate records of your income and expenses throughout the year in case you do not receive a 1099 form. You may also want to consult with a tax professional to ensure that you are correctly reporting your income and taking advantage of all available deductions.
Conclusion
It's not difficult to obtain and fill out your Uber driver tax information. If you've never worked as a sole proprietor or self-employed individual before, you'll need to pay attention to the details of this article. Also, see our article on best credit cards for Uber drivers and the best tips for Uber drivers if you want to save more money.
