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Dont 4get to deduct part of ur phone bill and data plan too! When i filed my taxes for uber last year i deducted 80% of my phone costs cuz thats bout how much i use it for the app. also car washes, hand sanitizer, water/snacks for customers if u provide those. lots of little things add up!!
I'm always worried about claiming too many deductions and getting audited. Are you sure all those things are legit deductions? Especially the phone bill part?
Yes, those are legitimate business deductions as long as you can justify the business use percentage. For the phone bill, you need to be reasonable - if you use your phone 80% for Uber/business purposes, then 80% is deductible. But make sure you can back that up if questioned. Car washes, sanitizer, and customer amenities are definitely deductible since they're directly related to maintaining your vehicle and service for business purposes. Just keep your receipts and maintain good records showing these expenses were for your rideshare business. The key is being honest and reasonable with your percentages. Don't claim 100% of your phone bill unless you literally only use it for business, but claiming a legitimate business portion is perfectly fine.
Great question! I've been driving for Uber for about 3 years now and dealt with this exact situation. The consensus from my CPA and what I've found through experience is that those miles to the city ARE deductible as long as your app is on and you're available to accept rides. Here's what I do: I turn my Uber app on before I leave my house and keep it on during the entire 45-minute drive to the city. Even though I rarely get pings in the rural areas, the fact that I'm "available for work" makes those miles business miles rather than commuting miles. I use a mileage tracking app (I prefer Everlance) that automatically logs when I'm driving with location data, and I make notes about when my Uber app was active. This creates a solid paper trail if the IRS ever questions it. One tip: some drivers also do DoorDash or other delivery apps simultaneously during that drive to the city since food delivery can work in more rural areas than rideshare. That way you're potentially earning during the commute and it's clearly business mileage. Keep detailed records and you should be fine claiming those miles!
I had the exact same message show up on my account last year! It's basically just the IRS's way of saying they created a record in their system to track the stimulus payments, but like others said, it doesn't mean you owe anything or that you definitely got a payment. The confusing part is that "This message does not mean that you qualified for the payment" line - it's just their legal disclaimer. What you really need to do is check your actual account transcript or look at your 2021 tax return to see if you received any EIP payments that year. The system message is more about their internal bookkeeping than your actual tax situation.
This is super helpful! I was getting worried about that disclaimer too. So basically I just need to check my 2021 return to see if I actually got any stimulus money that year, right? The message itself is just the IRS being extra cautious with their wording?
Exactly! The IRS is just covering themselves legally with that disclaimer. Your 2021 return (Form 1040) would show any EIP you received on Line 30 under "Recovery Rebate Credit." If you got stimulus payments during 2021, they would have reduced any additional credit you could claim. The message is really just their way of saying "we made a file for tracking purposes" - nothing more scary than that!
I remember getting this exact same message and being so confused! What helped me was understanding that the IRS basically created these "placeholder" tax years for anyone who might have been eligible for stimulus payments, even if you didn't actually receive them. The key thing to remember is that this message appears for EVERYONE who had any potential connection to EIP payments - it's not personalized to your specific situation. To actually figure out what happened with your 2021 taxes and any stimulus payments, you'll want to: 1. Check your 2021 tax return (if you filed one) for Line 30 "Recovery Rebate Credit" 2. Look at your account transcript for actual payment records 3. Remember that the April 2022 deadline mentioned was just the standard filing deadline The confusing disclaimer about "not meaning you qualified" is just the IRS being overly cautious - they don't want people to assume they're getting money just because they see this message. Think of it more like a filing system notification than anything related to what you actually owe or are owed.
Another thing to consider is challenging your property tax assessment if you think your home is overvalued. I did this last year and got my assessment reduced by almost $40k, which saved me about $800 annually in property taxes. The process varies by county but usually involves showing comparable sales in your area that indicate your home is assessed too high. Many counties have a specific window each year when you can appeal.
Did you use a lawyer for your appeal or did you handle it yourself? I've been thinking about challenging mine but wasn't sure if it was worth hiring someone.
Great question about property tax appeals! I handled mine myself and it was actually pretty straightforward. Most counties have forms available online and the process is designed for homeowners to navigate without an attorney. I gathered comparable sales data from Zillow and the county assessor's website, took photos showing any property condition issues, and filled out the appeal form. The hearing was informal - just me presenting my case to a review board. The key was having solid comparable properties that sold recently for less than my assessed value. I'd recommend trying it yourself first since there's usually no fee to file an appeal. You can always hire a property tax consultant later if you're not comfortable with the process. Many of them work on contingency anyway, so they only get paid if they successfully reduce your assessment.
This is really helpful advice! I'm curious about the timing - when is the best time to start gathering comparable sales data? Should I be looking at sales from the past 6 months, or is there a specific time frame that carries more weight with assessors? Also, did you find that recent sales in your immediate neighborhood were more convincing than similar homes a few streets over?
Just a heads up to the original poster - if you haven't been making consistent estimated tax payments before now, you might want to check if you'll face any underpayment penalties. Starting EFTPS now is great going forward, but it doesn't fix any past underpayment issues. The IRS has a "safe harbor" rule where you generally avoid penalties if you pay 100% of last year's tax liability (or 110% if your income was over $150,000) or 90% of this year's liability in timely estimated payments.
Thanks for pointing this out. I've actually been making the quarterly payments by check until now, I just wanted to switch to the electronic system to make it easier. I did have a penalty two years ago when I first started and underestimated, but I've been more careful since then! Do you know if switching to EFTPS mid-year causes any issues with how the IRS tracks your payment history?
You're welcome! Sounds like you're on top of things with your payments - many new business owners miss that part. Switching to EFTPS mid-year won't cause any tracking issues with the IRS. They care that payments are made on time and in sufficient amounts, not which method you use. The IRS systems will recognize all your payments regardless of method - EFTPS payments will just show up in your account faster than checks. In fact, using EFTPS actually helps with tracking since you can view all your payment history online once you're set up, including payments you previously made by other methods.
As someone who just went through this exact process last month, I can confirm that the enrollment timeline is crucial to plan for. I'd also add that when you do enroll, make sure to keep your EFTPS login credentials somewhere very secure - unlike other online accounts, you can't just reset your password easily if you forget it. One thing that helped me was setting up recurring reminders in my calendar for the quarterly due dates (January 15, April 15, June 15, and September 15) so I never miss a payment deadline again. The peace of mind from electronic payments is definitely worth the initial setup hassle! Also, Sofia, since you mentioned having multiple businesses, you might want to consider keeping separate records of which payments correspond to which business income for your own bookkeeping, even though it all goes through one EFTPS account. It makes tax prep much easier at year-end.
This is really helpful advice! I'm also dealing with multiple income streams and hadn't thought about the bookkeeping aspect. When you say keep separate records of payments for each business, do you mean like splitting the quarterly payment amount and noting "X dollars for pottery business, Y dollars for coaching business" in your records? Or is there a more formal way to track this for tax purposes? I'm worried about making mistakes since this is all new to me - the pottery business has been pretty consistent but the coaching income is going to be much more variable.
CyberSiren
Quick tip - many states have marketplace facilitator laws now which means platforms like Etsy, Amazon, and eBay are required to collect and remit sales tax on your behalf regardless of whether you have nexus. This covers about 40+ states now. But be careful! If you sell on your own website or multiple channels, you still need to track your total sales across ALL platforms to determine nexus. The marketplace might handle collection for their platform sales, but they don't know what you're selling elsewhere.
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Miguel Alvarez
ā¢This is super important! I got hit with penalties because I thought Amazon handling sales tax meant I was covered everywhere. Didn't realize my Shopify sales counted toward the same thresholds. Expensive lesson learned.
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Grace Patel
As someone who went through this exact same confusion when I started my online business, I totally get your overwhelm! The good news is it's not as scary as it seems once you understand the basics. Since you're based in Arizona, you definitely need to collect sales tax there. For other states, you only need to worry about it once you hit their economic nexus thresholds (usually $100k in sales OR 200+ transactions per year in that state). Here's what I wish someone had told me when I started: 1. Check if Etsy is already handling sales tax collection for you in most states (they probably are!) 2. Keep detailed records of your sales by state - you'll need this info 3. Don't panic about registration until you actually hit thresholds 4. Consider using sales tax software once you start selling in multiple states The key is to stay organized from the start. I use a simple spreadsheet to track my monthly sales by state so I know when I'm approaching any thresholds. Most small businesses don't hit nexus requirements in multiple states right away, so you likely have time to figure this out properly. Focus on growing your business first - just make sure you're collecting Arizona sales tax and keeping good records. The rest will become clearer as your sales grow!
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Mateo Martinez
ā¢This is exactly the kind of practical advice I needed! I've been losing sleep over this thinking I was already doing something wrong. Your point about Etsy likely handling most of the collection is reassuring - I'll check my seller dashboard today. Quick question though - when you say "keep detailed records by state," are you talking about something more complex than just downloading my sales reports from Etsy? And do you know if there are any free tools or templates for tracking this stuff before investing in paid software? I'm still pretty small (maybe $15k total sales last year across all states) so I'm hoping to keep costs down while I get organized. Thanks for sharing your experience - it really helps to hear from someone who's been through this!
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