1. Tax Aspects of Being an Uber Partner March XX, 2016

2. About Me Full Name, # of years preparing taxes Certifications
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Welcome to our presentation today. Thank you for joining me here.
My name is __________. I’m a [TITLE] and have been with H&R Block for [number of years] and am [talk briefly about your certifications].

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4. What We’ll Discuss Today
Self-Employment
Taxable Income
Allowable Expenses
Deductions Specific to Vehicles
Recordkeeping
Accessing your Uber tax information
Today, we’re going to talk about the tax implications of being an Uber Partner.
Today we’ll go through:
An introduction to being self-employed.
How your income an expenses will be treated.
Deductions specific to the use of your vehicle.
The IRS’ recordkeeping requirements
And lastly, I will show you how to access your Uber tax information.
I expect this should be about an hour with lots of time for questions and answers at the end.
Before we get started I first wanted to ask you if there are any specific things you wanted to make sure I cover here today [open to audience, acknowledge questions and note that you’ll do your best to address in the presentation and if not, you will be happy to discuss afterwards too]
… great, let’s get started

5. What it means to be self-employed.
Tax treatment differs from that of an employee of a company.
Generally, income and expenses are reported on Schedule C.
Expenses directly reduce business income.
LLCs as being self-employed unless an election is made otherwise.
As an Uber Partner you are considered to be self-employed, this is also referred to as being a “sole-proprietor.” For tax purposes this is treated differently than being considered a common law employee. Rather than reported as wages, your income along with your allowable expenses are reported on Schedule C of Form This brings us to one advantage being self-employed has over being treated as an employee: your allowable expenses directly offset your income and are not subject to an income limitation or requirement to itemize deductions.
There are other options available to business owners, such as filing as a corporation, that we will not discuss today. However, it is important to note that the IRS does not treat limited liability companies (or LLCs) as corporations for tax purposes, unless an election is made to the contrary. Instead, the IRS “disregards” LLCs and treats their owners in the same manners as other self-employed individuals.

6. The Self-Employment Tax
Your profit is subject to the 15.3% self-employment tax.
Includes Social Security (12.4%) and Medicare taxes (2.9%).
Functions similar those same taxes normally withheld from an employee’s wages.
Calculated on Schedule SE.
Being self-employed means that your net income from your business (that is, your gross income after reduction for any allowable business deductions) is subject to the 15.3% self-employment tax, which is a tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. This tax is calculated on Schedule SE of your tax return.
It is important to note that the 12.4% Social Security portion is limited by income thresholds, meaning you will not pay it on net earnings in excess of $118,500 for However, an additional amount of Medicare taxes will apply if your income for the year exceeds a much higher threshold.

7. Income Reported to You by Uber
Uber Partners will typically receive three documents from Uber to assist in their taxes.
Form 1099-K
Form 1099-MISC
Uber Tax Summary
As an Uber Partner you will receive two tax statements from Uber, in addition to an income tax summary.
The first document is a IRS Form 1099-K that is used to report payments your fares received from riders as well as amounts collected by Uber collected on your behalf.
The second document is a IRS Form 1099-MISC that is used to report items of compensation received directly from Uber, rather than from individual rider fares.
The third document will be a tax summary prepared by Uber breaking down the amounts reported on the first two documents.

8. Form 1099-K Includes your gross fares received plus: Tolls Sales Tax
City Fees
Airport Fees
Safe Rides Fee
Black Car Fund
Miscellaneous 15
In addition to gross fares, the amount on the Form 1099-K also will include other amounts, which Uber collected and paid on your behalf.
They include:
Tolls collected
Sales tax
City Fees
Any applicable airport fees
The safe rides fee.
Black Car Fund fess (this applies to drivers in New York City only).
Though these amounts technically represent expenses they are taxable because they are being paid on your behalf by Uber. In most situations, you can then offset this by claiming these various expenses as deductions on your Schedule C.

9. Form 1099-MISC Referral Incentives Join & Support Commissions
Miscellaneous Income 15
Form 1099-MISC is used to report other items of income that are not reportable on the Form 1099-K. This includes amounts paid to you directly by Uber that do not represent fares from riders, such as referral incentives, join and support commissions, and miscellaneous income. Both the amount reported on Form 1099-K and the amount reported on Form 1099-MISC are included in your gross receipts on your Schedule C.

10. Uber’s Tax Summary This document breaks down amounts from IRS forms.
It also includes the following additional information:
Device Subscription Fees
Fuel Card Deduction Fees
The Uber Fee
Your On-Trip Mileage
This should be kept in records and brought to your tax appointment.
In addition to the IRS forms, Uber will provide its drivers with a “Tax Summary” that breaks down the individual amounts reported on the IRS forms as well as additional information to be used in the preparation of a driver’s income tax return. It is extremely important that you keep this summary in your tax records. When you have your taxes prepared your tax professional will use this document to determine your allowable deductions.

11. Deductions
To be a valid business deduction, an expense must be ordinary and necessary in carrying on the trade or business.
An ordinary expense is one that is common and accepted in the trade or business.
A necessary expense is one that is helpful and appropriate for the trade or business.
Next, let’s talk about the deductions you can take against your income. For an expense to be deductible against business income it must be both “ordinary” and “necessary”.
Basically, an ordinary expense is one that is common and accepted in the trade or business. This does not mean customary or usual within the taxpayer's experience, but rather, customary or usual within the experience of a particular trade, industry or community.
While a necessary expense is one that is helpful and appropriate for the trade or business. Ordinarily, the an individual business owner’s judgment as to what is a necessary expense is accepted.
The test the IRS uses for determining whether an expense is ordinary and necessary looks at whether a “hard-headed” businessperson (i.e., cheap), under the same circumstances, would have incurred the expense.

12. Deductions Other restrictions apply to: Inherently Personal Expenses
Capital Expenditures
Meals & Entertainment Expenses
Other restrictions apply to business deductions.
Expenses that are inherently personal in nature are never deductible as business expenses, this is true even if the expense might also serve a business need.
Capital expenditures cannot be “currently deducted.” These are expenses incurred in acquiring or improving an asset that has useful life greater than one year. In this situation, the expenses are recovered via depreciation deductions over the life of the asset. For example, your car is considered a capital asset, and you cannot deduct the cost of it in the year you purchase it. Instead, you must “capitalize” the cost of the car, and then claim deductions for depreciation over the life of the vehicle. It is important to note that certain capital assets can qualify for expensing in full in the year they are purchased if they qualify for either what is called “bonus depreciation” or the §179 deduction.
Lastly, meals and entertainment expenses, though deductible in certain instances are subject to a 50% limitation. It is highly advisable that you consult with a tax professional to determine which meals and entertainment you can deduct as expenses and the application of the 50% limitation.

13. Uber Specific Deductions
Most expenses shown on Uber’s Tax Summary are deductible depending on the circumstances.
H&R Block tax professionals have resources providing guidance specifically applicable to Uber driver clients
As previously stated, most of the expenses included in the amounts on your IRS forms, and broken down on your tax summary are deductible as trade or business expenses. Schedule C includes 19 different lines where your expenses may be reported. Making sure each expense ends upon the correct line of this Schedule is important as the IRS pays close scrutiny to this schedule in particular.
H&R Block tax professionals have resources available to them specifically in regards to Uber drivers, and the correct reporting of their income and expenses. Therefore, we highly recommend that you seek the assistance of one of our trained professionals to prepare your tax return.

14. Vehicle Specific Deductions
The IRS pays close attention to vehicle related deductions on individual tax returns.
Vehicle deductions have further restrictions due their typical nature as personal-use property.
What types of vehicle use is deductible?
How is deductible vehicle use reported?
Let’s move to expenses specifically related to the use of your car in your business.
Due to the personal nature of automotive expenses the IRS pays close attention to vehicle related deductions on individual tax returns.
First, we will discuss what actual travel is deductible. After that, we will go into how deductible vehicle use is reported.

15. Deductible Transportation
“On-trip mileage” is by definition is deductible.
This is the mileage amount of miles you drove while you were actually collecting a fare from a passenger.
Complicated rules must be applied to determine if other miles driven are deductible.
When it comes to what types of vehicle use is deductible, the first thing we should get out of the way is that your “on-trip mileage” shown on your Uber Tax Summary is almost always going to be deductible. This is the amount of miles you drove while you had a rider in the car and were collecting a fare.
With other miles you incur are deductible is where the situation gets complicated.

16. Deductible Transportation
The IRS does not allow a deduction for commuting from one’s residence to work.
From a driver’s perspective, driving from their residence to pick up their first rider of the day is essentially considered nondeductible commuting by the IRS.
Similarly, driving from dropping off your last rider of the day back to your personal residence is also nondeductible commuting.
The IRS specifically denies deductions for commuting, that is, driving from one’s residence to their place of business. For most individuals, this is literally driving to and from work every day.
This rule also applies to for-hire drivers, such as yourselves. However, instead of driving to and from work from your residence, this rule applies to driving to and from your first and last business stop per day.
Thus, driving from your residence to pick up your first paying passenger in your area of the day is considered nondeductible commuting miles. Similarly, miles driven between dropping off your last paying passenger of the day and your residence are also considered nondeductible commuting.

17. Deductible Transportation
Miles driven after dropping off one passenger to another paying passenger is deductible.
The deductible mileage is based off of the most direct route possible between the two locations.
This is typically called the “business stop rule.”
However, mileage is deductible when you are not returning to your residence after dropping off a previous paying passenger and are traveling directly to pick up another paying passenger.
The amount of your actual business miles in this situation is based off of the most direct route possible between the two locations.

18. Example
John leaves his residence to pick up a (A). After dropping of (A) he picks up and drops off (B) and then (C). Following dropping off (C) he returns home.
His deductible miles are shown in green lines
His nondeductible miles are shown in black. A B C
To illustrate, suppose John leaves his residence to pick up a (A). After dropping of (A) he picks up and drops off (B) and then (C). Following dropping off (C) he returns home. His deductible miles are shown in green lines and his nondeductible miles are shown in black.
It is important to note that other miles you drive for business may be deductible based on the facts and circumstances. Each taxpayer’s situation is different, and therefore we cannot go into specific detail during this presentation.

19. Vehicle Deduction Options
Individuals have two options when deciding how to report their deductible vehicle usages:
The Actual Expense Method
The Standard Mileage Method
Generally, the choice of using one of these methods is binding for so long as you own the vehicle.
Now that we’ve covered the basics of what actual vehicle use is deductible, let’s move to the methods that can be used to deduct that vehicle use.
Individuals have two options to when it comes to reporting deductible business use of their vehicles: the actual expense method and the standard mileage method.
Choosing the right option for you is important from the start, because your choice is generally binding for the entire time that you own the vehicle.

20. Actual Expense Method
Must determine what it actually costs to operate the car for the portion of the overall use of the car that is business use.
Include gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments) attributable to the portion of the total miles driven that are business miles.
Allowable depreciation is often limited.
First, the actual expense method, which is exactly as its name describes.
This method requires individuals to determine what it actually costs to operate the vehicle for the portion of the overall use of the vehicle that is business use.
Expenses covered under the actual expense method include gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments) attributable to the portion of the total miles driven that are business miles.
Due to IRS rules regarding the depreciation of automobiles, an individual’s depreciation deduction for their vehicle may be limited under the actual expense method.

21. Standard Mileage Method
The easiest option.
Under this method all allowable deductions, including depreciation, are included in a set rate allowed per business miles driven.
57.5 cents per mile in 2015
Depreciation included in the rate, and cannot be taken separately.
Can deduct tolls and parking fees in
addition to the rate.
On the other hand, individuals may use the standard mileage method to report their vehicle deductions, which is by far the easier option.
Under this method all allowable deductions, including depreciation, are included in a set rate allowed per business miles driven.
For 2014 the rate was 56 cents per mile.
Under this method the allowable depreciation is included in the rate, and cannot be taken separately as an expense.
Though the rate covers most costs of operating a car, tolls and parking fees are deductible in addition to the deduction based on the rate.

22. Recordkeeping Requirements
Keep records for at least four years.
For vehicle deductions, keep track of the cost of the car and any improvements, the date the you started using it for business, the mileage for each business use, and the total miles for the year.
Keep track of the date of the use of the car.
Keep a log of your individual rides to substantiate off-trip mileage.
Records may be creatable from Uber provided records.
Moving on to some more general topics, it cannot be emphasized how important it is that you maintain adequate records. As with any tax issue, your records are the foundation that your tax return stands on. A good recordkeeping system includes a summary of your business transactions. Business transactions are ordinarily summarized in books called journals and ledgers.
Records such as receipts, canceled checks and other documents that support an item of income or a deduction, or a credit appearing on a return must be kept so long as they may become material in the administration of any internal revenue law, which generally will be until the period of limitation expires for that return. For assessment of tax you owe, this generally is 3 years from the date you filed the return. Returns filed before the due date are treated as filed on the due date.
In the case of vehicle deductions, you will want to keep track of the cost associated with your car and the dates it was used for business purposes. To substantiate off-trip mileage you will want to keep a log of the time and place of individual pickup and drop-off locations.
Records from Uber may, or may not, be used to create, or back-up your own records.

23. Accessing Uber Tax Information
That sums up the basic tax implications of being an Uber partner. Before I open for Q&A I would like to show you how to access your Uber Tax Summary, as well as H&R Block’s coupon for discounted tax preparation.

24. Accessing Uber Tax Information
Log in at partners.uber.com
Click on Payment Statements
To access this information, first log in at partners.uber.com
Click on payment statements.
Click on 2015 Tax Information

25. Accessing Uber Tax Information
Log in at partners.uber.com
Click on Payment Statements
Click on ‘2015 Tax Information’ in the upper right hand corner
2015
Click on 2015 Tax Information
Scroll down to the “Get Help from the Pros” section.
In this section you H&R Block Coupon as well as your other tax information will be shown.
2015

26. Accessing Uber Tax Information
Log in at partners.uber.com
Click on Payment Statements
Click on ‘2015 Tax Information’ in the upper right hand corner
Scroll down to the “Get help from the Pros’ section, where you coupon will be available.
To access this information, first log in at partners.uber.com
Click on payment statements.
Click on 2015 Tax Information
Scroll down to the “Get Help from the Pros” section.
In this section you H&R Block Coupon as well as your other tax information will be shown.

27. Questions?
Thank you for taking the time to attend this informational session. I will now open up the floor to your questions.