1: Record your miles daily while out ridesharing including going home if run out of driving time or app is off.
2: Record any personal miles not associated with ridesharing.
3: Uber is recording your miles, gives you a paper at the end of the year, but it’s only recording online miles, not when your going home with the app off but still associated with your business or else you wouldn’t have taken those miles.
4: Save all your receipts associated with ridesharing, categorize and total them up for tax time. If those receipts are more than the x amount of tax credit per mile, then your accountant will use that amount instead as it’s higher.
Usually what I do since I rideshare full time is only recording personal miles and deduct that off the odometer at the end of the year. Do record your odometer miles occasionally less the vehicle is in an accident or stolen etc.
You get, as a sole proprietorship, a 58 cents a mile, 62.5 cents a mile after July 1 st, tax credit. So recording those miles is important.
I highly recommend H&R Block and tell them your life story. You may qualify for disaster or other tax credits you were not aware of. I got a $68,000 tax credit that way and after all other deductions then whatever left over gets taken from the $68k and what’s left gets rolled over to next year.
Also keep in mind that each mile your driving your costing yourself apx. .75 cents a mile, 60 cents for costs and .15 cents a mile needs to be saved for a replacement vehicle.
With .25 cents a mile towards your pay all equals to $1 per vehicle mile driven.
Now rideshare assumes that your going in a direction anyway and thus your trying to save costs and can take another along. So after you get your pay you divide the miles driven, including back to your ‘area’ or home and that’s your pay per mile. You learn quickly what trips to avoid (usually the very long ones as the odds getting one coming back are about zero).
Doing rideshare as an income source you need to make sure you make more in pay and tips, than the miles you drive daily or your just burning yourself and your vehicle out. Rather difficult to get a car loan on just a ride share income. Need to pay cash for your vehicles and it’s not recommended to pay more than $20,000 because of the high mileage ridesharing incurs just burns them out.
I know my answer was more than you expected, but just to let you know the costs associated with ridesharing is high and the pay is minimal, below minimum wage. It is NOT recommended, however it’s a good second job or gig job where you do it when the opportunity strikes.
Make sure you take trips only on the meter because the required commercial insurance is only active during a trip. Most places it’s illegal to operate a cash taxi without approval, license and commercial insurance active.
Good.luck
Leave a Comment