When you're a driver for a ride-sharing company such as Uber, Lyft or other car sharing service, the most important thing to understand about your taxes is that you are probably not an employee. Drivers for these companies are usually independent contractors, a fact that has tax implications both at filing time and year-round.
Chances are you will receive a 1099 in January for the income you earned while performing ride-sharing services for Uber or Lyft. We have typically seen that they report the entire commissions you earned and many of our clients were initially confused as this amount did not agree to the amount they were paid. This is due to the fact that before they paid you they deducted their fees from your check therefore you received your direct deposit AFTER their fees were taken out HOWEVER on the 1099 they are reporting 100% of the fares that were allocated to you. Remember these fees are a deduction on your tax return.
Now being an independent contractor means that you are self-employed. As far as Uber or Lyft is concerned, you're the owner of a separate business that it uses to provide driving services. So when you receive your payment, understand that its likely no taxes have been taken out.
Keep in mind that the state of Hawaii will require you to obtain a General Excise Tax license and remit taxes to them on a monthly, quarterly or semi-annual basis. Failure to do so will result in additional penalties and interest charged to you. Non-payment of GE taxes can also lead to liens, levies, and garnishments. To apply for a GET license click here.
Our tax organizer for UBER and LYFT Drivers will help you organize your tax information and make sure you don't miss any important deductions. Be sure to ask your Tax Professional about other deductions that may apply to your specific tax return.
Please complete the following steps to take advantage of this tax organizer.
1. Click on the "View Tax Organizer" button below to bring up the organizer in a new window.
2. Print the organizer by clicking on the printer icon on the top of the screen.
3. Fill out all the information you can.
4. Call us and schedule a meeting.
5. Bring the completed tax organizer and all supporting documents to the meeting.
Please contact us at the office any time if you have questions. (808) 529-1040