When entering "date placed in service" for rideshare drivers, does it mean first time ever used, first time in 2023, or purchase date?
Title: When entering "date placed in service" for rideshare drivers, does it mean first time ever used, first time in 2023, or purchase date? 1 I'm working on my taxes as a rideshare driver and I'm confused about what "date placed in service" actually means on the tax form. I've googled it and everyone just gives the exact same description without actually explaining it clearly. Does "date placed in service" mean: - The very first time I ever used my car for rideshare driving? - The first time in 2023 that I used my car for rideshare driving? - Or simply the date when I purchased the vehicle? I started driving for Uber last year after having my car for about 2 years, so these would be very different dates for me. Really need to get this right for my depreciation calculations. Thanks for any help!!
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Victoria Brown
8 The "date placed in service" means the date you first started using the vehicle for business purposes (in your case, rideshare driving) - not when you purchased it and not the first date you used it each tax year. This date is important because it's the starting point for calculating depreciation on your vehicle. If you bought your car 2 years ago for personal use and then started using it for rideshare last year, the "date placed in service" would be the first day you used it for rideshare work, not your original purchase date. Make sure you keep good records of this date, as you'll need it for future tax returns as well. This affects your Section 179 deduction eligibility and depreciation calculations for years to come.
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Victoria Brown
•15 So if I started driving for Lyft in 2021, stopped for all of 2022, and started again in 2023, would my date placed in service still be that first day in 2021? Or would I use the 2023 date since I'm filing for 2023?
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Victoria Brown
•8 Your date placed in service would still be that first day in 2021. The "placed in service" date doesn't reset when you take breaks - it's the very first time you started using the vehicle for business purposes. If you've already taken depreciation in previous tax years (2021 in your case), you need to continue using that original date for consistency. The IRS looks at the entire lifespan of the asset's business use, even if there were periods where you didn't use it for business.
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Victoria Brown
12 After struggling with this exact issue last year, I found taxr.ai (https://taxr.ai) incredibly helpful for my rideshare tax questions. I was confused about vehicle depreciation and the "date placed in service" too, and the standard explanations online were just copying each other without giving practical examples. I uploaded my previous returns and some documentation, and they explained not only what the date meant but how it affected my specific depreciation schedule based on my driving patterns.
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Victoria Brown
•6 Does it help with figuring out the actual percentage of business use too? I drive my car for both personal use and rideshare and I'm never sure if I'm calculating that correctly.
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Victoria Brown
•19 I've been looking at different tax help options. How does taxr.ai compare to just going to an accountant? Is it cheaper? I'm worried about messing up my taxes since I just started driving last month.
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Victoria Brown
•12 It absolutely helps with business use percentage calculations. They have a specific section for rideshare drivers that helps you track and calculate your personal vs. business mileage properly, which makes a huge difference in your deduction amounts. As for comparing to an accountant, I found it more affordable while still getting expert guidance. The benefit is you get accountant-level advice without the hourly rates. Since you just started driving recently, it would be especially helpful for getting started right with proper record-keeping, which will save you headaches next tax season.
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Victoria Brown
19 Just wanted to update - I tried taxr.ai after asking about it and I'm really glad I did! It walked me through exactly what "date placed in service" meant for my situation (I had been driving for both Uber and Lyft at different times) and showed me how to document everything properly. It even caught that I could still claim some startup costs I didn't know were deductible. The explanations were much clearer than the circular definitions I kept finding online.
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Victoria Brown
7 I had the same confusion with "date placed in service" last tax season and spent HOURS on hold trying to get someone at the IRS to explain it. After multiple failed attempts, I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 15 minutes. They have a video showing how it works: https://youtu.be/_kiP6q8DX5c. The agent explained that for rideshare, the date placed in service is specifically the first date you used the car for business, and that this affects how you calculate depreciation over the life of the vehicle.
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Victoria Brown
•23 Wait, how does that work? I thought it was impossible to get through to the IRS these days. I've literally given up trying to call them about my missing refund from last year.
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Victoria Brown
•11 Sounds like a scam honestly. The IRS phone lines are notoriously understaffed. How could some service magically get you through when millions of people can't get through on their own?
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Victoria Brown
•7 It's basically a callback service that navigates the IRS phone tree and waits on hold for you. When they reach a live agent, they call you and connect you directly. I was skeptical at first too but it actually worked. As for your missing refund, that's exactly the kind of issue where talking to a live person helps. They can see what's happening with your specific return in a way the automated systems can't.
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Victoria Brown
11 I have to admit I was completely wrong about Claimyr. After dismissing it as a probable scam, I was desperate enough to try it when my rideshare tax return got flagged for review because of vehicle depreciation issues. Not only did I get through to the IRS (which I hadn't been able to do on my own after multiple attempts), but the agent immediately saw the issue with how I had recorded my "date placed in service" and helped me understand how to fix it. Saved me from what would have been a significant adjustment to my return.
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Victoria Brown
3 One thing nobody mentioned yet - if you use your car for both personal and business, and the business use is less than 50%, you CANNOT use Section 179 deduction and have to use standard depreciation with the date placed in service being when you first used it for rideshare.
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Victoria Brown
•17 Is that also true if you're leasing the car? My tax software is asking for all this info but I don't own my vehicle.
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Victoria Brown
•3 For leased vehicles, it works differently. You generally can't claim depreciation or Section 179 on a leased vehicle because you don't own it. Instead, you can deduct the business portion of your lease payments as a business expense. You still need to track your business vs. personal use percentage, but you'll apply that percentage to your lease payments rather than calculating depreciation. The "date placed in service" would still be when you first started using the leased vehicle for business purposes, but it's used differently in your tax calculations.
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Victoria Brown
14 Does anyone use a dedicated app to track their mileage for rideshare? I'm trying to be more organized this year and want recommendations.
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Victoria Brown
•2 I use Stride. It's free and automatically tracks your miles while you drive. You can categorize trips as business or personal, and it calculates your potential tax deduction based on the current IRS mileage rate. It also lets you track other expenses like car washes, phone bills, etc. Been using it for 2 years now and it makes tax time way easier.
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