Taxes are not automatically withheld
As an Uber partner, you work for yourself as an independent contractor. Because of this, you’ll receive a 1099 form each year instead of the W-2 you may have be used to getting.
Unlike a traditional full-time or part-time job, Uber does not withhold taxes from your earnings. That’s why the government requires you to pay income tax and self-employment tax every year.
There are benefits to being an independent contractor, although the way you file taxes is different. One advantage is that you may be able to deduct expenses from your earnings and only pay taxes on what’s left. If you keep track of things like your mileage and vehicle costs, this could add up to a big chunk of savings.
The 1099 form
Find your tax documents
Every Uber/Lyft partner receives a monthly tax statement. And if you earn $600 or more during the year, you’ll also receive a 1099 tax form by January 31.
The 1099 form includes how much you made, what fees Uber/Lyft took out, and how many miles you drove while on the app. Always wait until you receive your 1099 before filing your taxes.
Don’t forget deductions
Speak with a tax advisor to see which business costs you can claim full or partial deductions for:
- Vehicle costs like depreciation, lease payments, gas, tune-ups, registration, car washes, new tires, etc.
- Car insurance
- Tolls or parking costs
- Your phone and phone plan
- Uber/Lyft fees
- Freebies for riders, like water or candy
- Accounting and bank costs
Plan, save, pay
Track your earnings and expenses
Intuit, offers every access to a free version of Quickbooks Self Employed. This software makes it easy to track earnings, miles, and expenses throughout the year so you’re better prepared for tax time.
With Quickbooks, you can pay estimated taxes quarterly instead of waiting until tax season.