Can Uber Drivers Deduct Mileage?
Yes, Uber drivers can deduct mileage from their taxes. When you drive for Uber, you are essentially using your car as a business vehicle, and the IRS allows for a standard mileage deduction for business use of a car. As of 2021, the standard mileage rate for business use of a vehicle is 56 cents per mile. This means that for every mile you drive while working for Uber, you can deduct 56 cents from your taxable income.
FAQs About Uber Drivers Deducting Mileage
1. How do I track my mileage as an Uber driver?
As an Uber driver, it’s crucial to keep accurate records of your mileage. You can use apps specifically designed for tracking business mileage, such as MileIQ or Everlance. Alternatively, you can keep a manual log of your miles driven for business purposes.
2. Can I deduct mileage from my personal commute?
No, you cannot deduct mileage for your personal commute from your home to your regular place of work. However, as an Uber driver, any mileage accrued while driving to pick up passengers or between drop-offs can be deducted.
3. What if I use the actual expense method instead of the standard mileage rate?
If you choose to use the actual expense method for deducting vehicle expenses, such as fuel, maintenance, and depreciation, you cannot also deduct mileage. You must choose one method or the other for each individual vehicle you use for business purposes.
4. Are there any special considerations for electric or hybrid vehicles?
Yes, there are special rules for electric and hybrid vehicles. The standard mileage rate for electric cars is different from that of traditional gasoline-powered vehicles, and the IRS may update these rates annually.
5. Do I need to keep receipts for my mileage deductions?
While you don’t need to track every individual expense like you would with the actual expense method, it’s still important to keep detailed records of your mileage in case of an audit. Save your logs and any receipts related to vehicle expenses.
6. Can Uber track my mileage for me?
Yes, Uber provides drivers with access to their trip data, including mileage driven. However, it’s still recommended to keep your own records for your own peace of mind.
7. What if I drive for multiple ride-share companies?
If you drive for multiple ride-share companies, you can deduct mileage for each company you work for. Keep detailed records of your mileage for each company separately.
8. Are there any restrictions on the type of vehicle I can use for Uber?
Uber does have vehicle requirements, and the IRS does not allow for mileage deductions for vehicles that do not meet basic standards for business use. Make sure your vehicle qualifies before attempting to claim mileage deductions.
9. What happens if I get audited for my mileage deductions?
If you have kept accurate and detailed records of your mileage, you should be able to defend your deductions in the event of an audit. The key is to be honest and consistent in your record-keeping.
10. Can I deduct mileage if I use a rental car for Uber?
Yes, you can deduct mileage for a rental car used for business purposes. Keep a log of the miles driven just as you would with your own vehicle.
11. What if I also use my vehicle for personal use?
If you use your vehicle for both personal and business use, you can only deduct mileage for the business portion. Keep accurate records of when you are using your car specifically for Uber driving.
12. How often should I track my mileage for tax purposes?
It’s best to track your mileage in real-time or at the end of each day. This will ensure that you don’t miss any important records and that your deductions are accurate when it comes time to file your taxes.
