Tax write-offs for renting a car through Uber - what expenses are deductible?

Yes, you can definitely deduct the Tesla rental payments as a business expense when driving for Uber! The IRS allows you to deduct ordinary and necessary business expenses, and the rental fee falls into this category since you're using the vehicle exclusively (or primarily) for business. Just make sure you're keeping detailed records of when you're using the vehicle for business vs. personal use. If you use the rental car for any personal trips, you'll need to track that and only deduct the business portion of the rental fees. Regarding your second question - yes, you can use both methods in the same tax year, but not for the same vehicle. For the period when you're using your own car, you can take the standard mileage deduction. Then when you switch to the rental, you'd deduct the actual rental expenses for that period. Just be super clear about the dates when you switched from one to the other in your records.

After struggling with exactly this situation last year (debating between buying vs renting for my rideshare gig), I found this amazing tool called taxr.ai (https://taxr.ai) that helped me figure out which option was actually better from a tax perspective. I uploaded my previous 1099s and rental agreement, and it analyzed everything to show me the optimal tax strategy based on my specific situation. It showed me that in my case, the rental deduction actually saved me more money than the standard mileage deduction would have! Plus it helped me identify other expenses I didn't even know I could write off, like a portion of my phone bill, phone mount, dash cam, etc.

Just wanted to update everyone - I tried taxr.ai after seeing the recommendation here and WOW what a game changer! I was in the exact same situation (own car part of year, rental part of year) and was super confused about how to handle it. The tool showed me exactly how to properly document both periods and maximize my deductions. It also pointed out that I could deduct a portion of my cell phone bill, my Spotify subscription (which I use during rides), and even part of my health insurance premiums as self-employment deductions - none of which my previous tax guy ever mentioned! My projected refund is almost $1,200 more than what I was expecting based on last year. Seriously wish I'd known about this sooner.

If you're having issues with Uber's tax documents or need clarity on rental deductions, good luck getting through to Uber support or even the IRS these days. I spent THREE WEEKS trying to get through to someone at the IRS about this exact situation last year. Finally discovered Claimyr (https://claimyr.com) and they got me connected to an actual IRS agent in under 20 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that yes, you can deduct the rental costs as a business expense when using it for Uber, and explained exactly how to document the transition from personal vehicle to rental in the same tax year. Saved me so much stress and probably prevented me from making a costly mistake on my return.

I have to eat my words from my previous comment. After getting frustrated with getting absolutely nowhere trying to reach the IRS about my rideshare deductions, I broke down and tried Claimyr yesterday. Not expecting much, I was SHOCKED when I got a call back in 15 minutes connecting me to an actual IRS representative. The agent was super helpful and walked me through exactly how to handle my rental car deductions vs. standard mileage for my own vehicle. She even explained how to properly document the transition period when I was using both. Turns out I was about to file incorrectly which could have triggered an audit. Worth every penny just for the stress relief of knowing I'm doing it right!

Just watch out for the fine print in those Tesla rental agreements for Uber. A friend of mine did this last year and got hit with a bunch of unexpected fees that weren't deductible. The base rental was deductible but they charged him for "excessive mileage" and some other bogus fees that the IRS considered personal. Also check insurance requirements carefully. Some rental programs include insurance but others don't, and getting your own commercial insurance can add hundreds to your monthly cost.

One thing nobody mentioned - if you rent through these Uber programs, track your charging costs separately too! Sometimes they give you free Supercharger access, but sometimes not. If you pay for charging, those costs are deductible too, just like gas would be. I rented a Model 3 last summer and saved all my charging receipts - added up to about $90/week in deductions my tax guy said I wouldn't have been able to claim otherwise.

Great question about mixing deduction methods! I went through this exact scenario two years ago when my personal car broke down mid-year and I switched to Uber's Tesla rental program. You're absolutely right that you can't use standard mileage for a rental vehicle - the IRS is very clear about that. But the good news is that the entire $340 weekly rental fee is indeed deductible as a business expense, assuming you're using the vehicle primarily for rideshare/delivery work. The key thing to remember is documentation. When you make the switch, create a clear cutoff date in your records. For the period with your personal vehicle, track your business miles and use the standard mileage rate (currently 65.5 cents per mile for 2023). Then from your rental start date forward, keep all rental receipts and track your business vs. personal use percentage. Also don't forget about the charging costs if your rental doesn't include free Supercharger access - those are deductible too! I kept a simple spreadsheet with charging receipts and it added up to decent additional deductions. One tip: if you're on the fence about timing, consider waiting until the start of a new quarter to make the switch. It makes the record-keeping cleaner and reduces any confusion if you get audited.