If you are one of the thousands of people who started to drive for ride share companies such as Uber or Lyft, then this may be the first year that you are filing your taxes as self-employed. You have enjoyed the ability to make your own schedule, work when you want, and make decisions to help improve your income. But what does all of this mean for your taxes?
As far as the ride share companies are concerned you are an independent contractor who is not considered an employee, but rather a contractor who provides a service. This is why when you get your check from these companies they do not withhold any taxes like a typical employer would. This is the reason that you will receive a 1099 form rather than a W-2 for your taxes.
You will most likely report your 1099 on Schedule C, profit or loss from business.You can also use Schedule C to list your business-related expenses.
The ride share companies also will provide you with a tax summary that breaks down the totals for both your 1099 forms.
You are also required to have a smartphone for your businessso keep in mind you can deduct its expenses. These expenses may include:
While all of this may seem a little overwhelming, talking to your bookkeeper or accountant can help to lower the stress that is often experienced when preparing your taxes. These professionals may also be able to help you find more deductions reducing the total amount that you owe the IRS when it comes tax time.