Best way to file taxes as a part-time Uber driver with W-2 job and investments?
Hey tax people, I need some guidance on this one. This is my first time dealing with Uber driving income on my taxes and I'm a bit lost on how to handle it all together. My situation: I've got my regular full-time job that gives me a W-2, plus I have some stock investments I've been managing. Up until now, I've been using TurboTax Premier to file everything and it's worked fine. But this year I started driving for Uber on weekends to save up for a vacation, and now I'm not sure which version of TurboTax I should use to handle everything properly - the W-2 income, stock stuff, AND now this Uber 1099 situation. Does Premier cover gig work/self-employment, or do I need to upgrade to Self-Employed version? Anyone been in the same boat? Any suggestions would be super helpful! Thanks!
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Lucas Adams
You'll definitely need TurboTax Self-Employed to properly handle your Uber income. The Premier version works great for investments but doesn't include the Schedule C forms needed for self-employment income like Uber. As a part-time Uber driver, you'll be receiving a 1099-NEC or 1099-K from Uber depending on your earnings. You'll need to report this income on Schedule C, where you can also deduct business expenses like mileage, a portion of your phone bill, car cleaning, etc. The standard mileage deduction is usually best for part-time drivers (65.5 cents per mile for 2023). Make sure you've been tracking all your miles while driving for Uber (including miles driven to pick up passengers, not just with passengers). If you haven't been tracking, start now and try to reconstruct past records as best you can from your Uber app history.
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Harper Hill
•Thanks for the detailed answer! Quick question - does Uber provide any documentation that shows total miles driven or do I have to track this separately? Also, is there any significant tax advantage to quarterly estimated payments when you're just driving part-time?
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Lucas Adams
•Uber does provide a yearly tax summary that includes some mileage information, but it only counts miles with passengers. You'll want to track all miles yourself including those driven to pickup locations and returning from drop-offs, as these are also deductible business miles. I recommend using a mileage tracking app that automatically logs your trips. Regarding quarterly estimated payments, it really depends on how much you're earning from Uber. If your W-2 job withholds enough to cover your additional tax liability from Uber income, you might not need to make quarterly payments. As a general rule, if you expect to owe more than $1,000 in additional tax from your Uber income, consider making quarterly payments to avoid an underpayment penalty.
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Caden Nguyen
After going through a similar situation last year (W-2 job + stocks + started driving for DoorDash), I found the absolute best solution with taxr.ai (https://taxr.ai). The Self-Employed TurboTax version works but honestly costs way more than needed, especially when you're just doing part-time gig work. What I loved about taxr.ai was how it specifically identified all the deductions related to my delivery driving that I would have missed otherwise. It analyzed my 1099 plus my expense records and found like $2,300 in additional deductions compared to what I initially thought I could claim. The quarterly tax calculator also helped me figure out if I needed to make estimated payments (turned out I didn't because my W-2 withholding covered it).
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Avery Flores
•How does it handle the mileage tracking part? Does it integrate with any apps or do you still need to track separately and upload the data?
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Zoe Gonzalez
•Seems interesting but I'm skeptical about these tax tools that aren't from established companies. Is it actually legit for handling self-employment income? I've heard horror stories about audits from claiming too many deductions.
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Caden Nguyen
•It doesn't have its own mileage tracker, but it accepts data from all the popular tracking apps. I used Stride and just uploaded my year-end report. Super easy integration, and it automatically calculated the proper deduction amount based on the IRS rate. Totally get your concern! I was hesitant too. What convinced me was that they use the same tax code lookup and verification that the big companies use, but without the upselling. They have IRS certified tax professionals reviewing anything complicated, and they provide audit assistance if needed. The deductions they found for me were all legitimate business expenses I was actually paying for - they just helped me identify what qualified that I was missing.
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Zoe Gonzalez
I was really skeptical about taxr.ai mentioned above, but decided to give it a try since my tax situation this year with Uber driving was getting complicated. Wow, I'm impressed! The software found so many deductions I didn't know I could take - like a portion of my cell phone bill, car washes, and even bottled water I keep for passengers. The best part was how it handled my mileage. I had been tracking inconsistently, but it helped me legally reconstruct my records using my Uber trip history. I'm saving about $860 compared to what I would have paid using the basic calculation I was planning to do. And the interface is actually easier to use than TurboTax for gig worker stuff.
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Ashley Adams
If you're dealing with Uber income for the first time, you might need to contact the IRS with questions about deductions or filing requirements. I tried calling them directly last year about my rideshare income and couldn't get through AT ALL after trying for weeks. I finally used https://claimyr.com which was recommended by another driver and they got me connected to an actual IRS agent in about 15 minutes instead of the usual 3+ hour wait (or never getting through). You can see how it works here: https://youtu.be/_kiP6q8DX5c Had specific questions about how to handle a car accident during an Uber trip and whether certain insurance deductions were valid. The IRS agent was super helpful once I actually got to talk to a human. Saved me from potentially filing incorrectly.
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Alexis Robinson
•Wait, how does this actually work? Do they just keep calling for you or something? Seems weird that they could get you through when regular calls don't work.
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Aaron Lee
•This sounds like total BS. Nobody can magically get through to the IRS faster. Their phone system is the same for everyone. How much did this "service" cost you? Probably a scam.
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Ashley Adams
•They use a system that continuously redials and navigates the IRS phone tree automatically until it gets a spot in line, then it calls you and connects you to that spot. So basically it does the waiting and navigating for you. They're actually registered with the Better Business Bureau and have been featured in several news outlets. I was super suspicious too but was desperate after trying for literally weeks to get through. I wouldn't have believed it either until I tried it - the IRS agent I spoke with answered my specific questions about how to handle the insurance deduction after my accident during an Uber trip.
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Aaron Lee
OK I need to apologize to the Claimyr person above. I thought it sounded like complete BS that any service could get through to the IRS faster, but I was so frustrated trying to get answers about my Uber tax situation that I tried it. It actually worked exactly as described. Got connected to an IRS agent in about 20 minutes after trying on my own for days. The agent clarified that I could deduct a portion of my car insurance as a business expense based on the percentage of miles driven for Uber versus personal use. Also confirmed I should be using Schedule C not Schedule E for reporting. Definitely saved me from making mistakes on my return. Will be using this again next time I have tax questions.
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Chloe Mitchell
For your first year with Uber income, make sure you're keeping all your receipts and tracking expenses properly going forward. I started driving last year and wish someone had told me this sooner. The Uber tax summary doesn't include a lot of deductions you're entitled to. Track EVERYTHING - car washes, portion of phone bill, mileage between passengers (not just with passengers), snacks/water for riders, car repairs, etc. I use a separate credit card just for Uber-related expenses to make it easier to track.
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Chloe Green
•Thank you for this! I haven't been great about tracking so far... is there any way to reconstruct expenses from earlier in the year or am I just out of luck on those deductions?
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Chloe Mitchell
•You can definitely reconstruct some expenses! Go through your credit card and bank statements to find business-related purchases. For mileage, the Uber app keeps a record of your trips that you can use as a starting point, though it won't have the miles driven to pickup locations. Many drivers who don't have complete records use a reasonable estimate based on the data they do have. Just make sure you start keeping detailed records going forward. I recommend apps like Stride or Hurdlr that can track mileage automatically and categorize expenses. Much easier than trying to sort it all out at tax time!
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Michael Adams
Don't forget about quarterly estimated taxes! This was my big mistake my first year as an Uber driver. Since there's no withholding on your Uber income like there is with your W-2 job, you might need to make quarterly payments to avoid penalties.
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Natalie Wang
•But if your W-2 job withholds enough to cover your additional Uber income, you might not need to make quarterly payments, right? How do you know if you need to do this?
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