2. Uber/Lyft/Grubhub/etc.
For-Hire Drivers
Uber/Lyft/Grubhub/etc.
This is not a lesson in how to prepare Schedule C or the details of all the pertinent tax laws

3. Transportation Network Company (TNC)
TNC is a new term being used by government entities to refer to rideshare companies such as Uber and Lyft

4. For-Hire Drivers
Uber/Lyft and such view themselves as a third-party payment processor that facilitates payments between consumers (passengers) and business owners (the driver). As such, the driver is the contractor of the passenger, not of Uber/Lyft. Therefore, they issue a 1099-K, not a 1099-MISC to represent the payments processed on behalf of the driver (similar to Paypal) and these payments may include monies that the driver never sees.
1099-Misc may be issued for incentive payments, driver referral payments

5. For-Hire Drivers – Income
For-Hire Drivers report earnings on Schedule C
Uber/Lyft/etc. business code: All other transit and ground passenger transportation
Grubhub/DoorDash/etc. business code: Couriers and messengers
Loss on Schedule C is out of scope
Review documents during interview for all Schedule C scope criteria
Taxpayers determine their income, mileage and other expenses
Changed business code for Uber/Lyft/etc.
Third party network transaction means any transaction that is settled through a third party payment network, but only after the total amount of such transactions exceeds $20,000 and the aggregate number of such transactions exceeds 200.
However ...
Minimum thresholds of greater than $20,000 and more than 200 transactions do not apply to payment card transactions
Taxpayer should give you the total income earned, deductible miles and business expenses. We can assist and advise but we should not be the bookkeeper/accountant.

6. For-Hire Drivers - Income
Driving for multiple TNC’s (Transportation Network Company)
If the taxpayer drives for both Uber and Lyft only one Schedule C is needed
Combine the income and expenses from Uber and Lyft on Schedule C. Use a scratch pad for each entry
HOWEVER……..

7. For-Hire Drivers - Income
If the Taxpayer drives for Uber and/or Lyft and drives for Grubhub/DoorDash/etc one Schedule C is needed for Uber/Lyft and another Schedule C is needed for Grubhub/DoorDash/etc
Business Code Couriers and messengers - Uber/Lyft
Business Code Couriers and messengers- Grubhub/DoorDash

8. For-Hire Drivers – Income
Income reporting documents
Statement from the payer showing income, commissions and fees, mileage, etc.
Taxpayer needs to print from his/her online account
Form 1099-MISC
Form 1099-K common with Uber/Lyft
Payment Card and Third Party Network Transactions
May also receive cash (tips for example)
Third party network transaction means any transaction that is settled through a third party payment network, but only after the total amount of such transactions exceeds $20,000 and the aggregate number of such transactions exceeds 200.
However ...
Minimum thresholds of greater than $20,000 and more than 200 transactions do not apply to payment card transactions

9. Form 1099-MISC Enter amount on 1099-MISC and attach to Schedule C
Tax form may or may not be received.
Enter amount on 1099-MISC and attach to Schedule C
5,605

10. Form 1099-K Tax form may or may not be received.
Enter box 1a amount on Schedule C as gross payment
Form 1099-K
Enter tax withheld in Payments and Estimates section
Boxes 1b and all 5 boxes are subsets of box 1a. No need to enter these.

11. Form 1099-K or If No Tax Form (TaxSlayer)
Select Schedule C and enter in first Income field
Selecting 1099-K simply takes you to Schedule C entry page anyway
Total of Form(s) 1099-K plus cash income, but not Form(s) 1099-MISC income.

12. For-Hire Drivers – Expenses
Standard mileage rate (58¢/mile for 2019) in scope for For- Hire Drivers
Must use standard mileage rate in first year vehicle used for business or otherwise forever foreclosed from using that method for that vehicle
Out of scope if actual vehicle expenses claimed
First and last ride of day to and from home are nondeductible commuting miles unless taxpayer claims home office deduction (which is out of scope)

13. For-Hire Drivers – Expenses
Detailed records essential
Total mileage – business, commuting and other
Business expenses
Business use and purpose
All expenses must be reported – even if result is a net loss (which is out of scope)

14. For-Hire Drivers – Expenses
Add to standard mileage business portion of
Tolls: 100% business use when incurred as For-Hire Driver
Parking: 100% business use when incurred as For-Hire Driver
Auto loan interest
Auto personal property taxes
Taxpayer to determine business portion based on miles driven or other reasonable method when property not 100% business
Example:
Business miles 4,500 ÷ Total miles 45,000 = 10% business use
$1,000 interest paid on auto loan in 2019
$1,000 X 0.10 = $100 deductible auto loan interest on Schedule C

15. For Hire Drivers – Expenses
Examples of potentially 100% business use expenses
Uber/Lyft/Grubhub/etc. fees
Device subscription fees
Snacks and water for passengers
Passenger cell phone accessories, such as chargers and cables
Mileage tracking software
Airport fees
Business license
Ride sharing insurance
Dash camera
List of additional expenses are examples and not intended to limit only these expenses
Note Dash Camera may be 100% business use or ratable

16. For Hire Drivers – Expenses
Examples of ratable business-use expenses
Cell phone and mount
Flashlights and flares
First aid kit
Road-side assistance plans
Dash camera
List of additional expenses are examples and not intended to limit only these expenses
Note Dash Camera may be 100% business use or ratable

17. For Hire Drivers – Expenses
Examples of expenses included in standard mileage rate that are not deductible as business-use expenses
Maintenance and repairs
Oil changes
Car washes
Fuel
Normal insurance
Vehicle registration fees

18. UBER Driver Tax Preparation
Each driver has an on-line account with Uber. There is a folder for tax information. This folder may contain a K, a 1099-MISC and a document of supplemental information. This last document is critical.

19. Sample UBER Statement

20. Sample UBER Statement

21. Sample UBER Statement
Total gross receipts is reported on the 1099-K. This is entered as Income on a scratch pad on Schedule C.
Uber drivers also earn money for referrals. This pay shows up on the supplemental document and only shows up on a 1099-MISC if the total exceeds $600. If less than $600, add to the scratch pad.

22. Sample UBER Statement-Supplemental Info
The supplemental info shows a break down of the 1099-K payments processed. It represents fares charged, special supplemental fares charged (share rides etc.) AND charges to clients for tolls.
The supplemental fares were paid by the rider to Uber and therefore should be deducted as expenses.
Tolls are also an expense to be deducted. HOWEVER, Uber calculates tolls based on EZPass rates and only for the passenger trip, not for the driver's "return to base". The driver may not save EZPass billing records or segregate personal from business use so use judgment as some bridges/tunnels charge tolls both ways and some one way (sometimes the return trip only) and non-EZPass drivers pay extra.

23. For-Hire Drivers – Quality Review
Review payer statement and tax forms (1099-K and MISC)
Verify amount of cash income (tips) added to Schedule C
Confirm only business portion of expenses claimed
Remind taxpayer to maintain accurate written documentation of mileage and expenses

25. For Hire Drivers