Harry here. Uber and Lyft typically send out 1099s in early February, so hopefully you’ve been tracking all of your mileage! But if not, we’ve teamed up with Stride Drive for a guest post to help you figure out how you can still claim all those lost miles.
Check out their new Uber Tax Calculator, which can help you cut your taxes in half.
First of all, don’t panic! Many drivers have faced the same situation of not completely tracking their business miles or simply not knowing what to track. Sometimes new drivers don’t get the heads-up that their mileage is deductible. Often, drivers don’t keep a mileage log for all of the miles they’re allowed to deduct for the year.
Fortunately, rideshare drivers are in a good place when it comes to finding extra evidence. Since Uber, Lyft, and other rideshare companies keep pretty thorough records of your activity, rideshare drivers have access to more corroborating evidence than most independent contractors.
Even though using an app to track miles throughout the entire year is absolutely the best way to document your mileage deduction, the good news is that drivers can piece together a mileage log based on incomplete records. (Stride Drive is the best tool for tracking miles and expenses for both rideshare and delivery drivers. Plus it’s 100% free!)
According to the IRS, this includes either a “written statement containing specific information about the element,” or “supporting evidence that is sufficient to establish the element.”
In plain English, this means that if you’re filling in the blanks on an incomplete mileage log, you need to make sure your estimate matches what evidence you do have.
Believe it or not, the IRS gives a few specific examples of how to put together a post-facto mileage log. One example is of a delivery driver backing up a mileage deduction with the invoices from their deliveries. The invoices would be classified as “circumstantial, rather than direct” evidence of business mileage. The same goes for other independent contractors like real estate agents, who can use a date book of client meetings to prove that they had to drive for business on certain days.
How to claim your lost miles
Luckily, as a rideshare or delivery driver you have some pretty detailed records of where you’re driving and for what reasons. These records can be used to fill in the other deductible business miles that weren’t recorded by your rideshare app.
For example, let’s assume you’re an Uber driver who started driving in March, but who hasn’t kept a mileage log for the first half of your rideshare business.
1) Start with your trip logs
Uber will track your on-trip mileage for you. This includes your mileage when you have a passenger in the car, but not your mileage when you are driving to the passenger, or driving between trips to find places where you’re likely to be matched with a passenger.
Your on-trip mileage serves as the minimum mileage that you can deduct. It’s not a complete record of the business miles that you actually drove, but it’ll still save you money at tax time.
2) Find your total mileage
When you claim your mileage deduction on a Schedule C (or in a tax filing software), you’ll likely need to input how many miles you drove in total during the year, including personal and commuting miles. You need to make sure your total mileage deduction makes sense when compared to your total miles driven. Ideally you’d note your odometer readings at the beginning and end of the year, but you could also use old maintenance receipts to figure your total mileage (since these often record odometer readings).
Once you find this number, you’ve got a range for what your actual deductible mileage is. You’ll know that your actual deductible mileage is somewhere between your total miles, and your rideshare miles.
3) Look for documentation of your other business mileage
Let’s assume that you are missing the miles from:
- Between trips
- When driving from home to where you picked up your first trip
- From your last trip back home.
Here’s where the sleuthing starts. You’ll have to find evidence that proves you actually incurred this non-trip mileage while running your rideshare business. Here are a few ways you can find that evidence:
Calculate lost mileage for the commute to and from home
On a given day you can see where you began your first trip or ended your last trip, and how far away it is from your home. It’s a tedious process, but if you calculate the mileage between those two points, and can document your exact starting and ending locations, you can calculate your deductible mileage from that information.
For example, if you live in Oakland but commute to San Francisco every day to drive for Uber, calculate how many miles you drove to and from the city and include those in your deduction.
Calculate lost mileage between passengers
You also have records on where one trip ended, and where the next began. You can calculate the mileage that you incurred between dropping off one passenger and picking up another. Just be sure to include great notes on each drive that you add to your mileage log, and keep track of all of your supporting documents like Uber trip logs.
Want to double check your estimates?
Find recordings of your odometer readings throughout the year. This helps corroborate your story that your estimated mileage is consistent with your car’s total usage throughout the year. Maintenance receipts are great sources for odometer readings.
4) Find your driving patterns
The investigative work described above sounds like a hassle, right? Don’t worry, you can take the typical mileage you drive in a week or month and apply it to a larger sample of time.
If you find your total deductible mileage for one month, and can prove that you drove about the same amount each month, then you can apply your typical monthly mileage to the rest of the year.
For example, let’s say you were only tracking your Uber mileage for November and December of 2016. If you can show that your Uber income and trip number was the same for all 12 months of the year, and you know that you drove the same number of miles (or within a small range), then you could use your Uber income and trip logs as proof that your deductible mileage was consistent throughout the year.
One note: the goal of this exercise isn’t to re-create the mileage log that you should have kept in the first place. Unfortunately, it’s too late to have a complete mileage log of your business driving for the year, so don’t start making stuff up in order to have a complete log.
Rather, you’re looking to prove your average with as much evidence as you can. For rideshare drivers, you’ve got a lot of built-in evidence–after all, you didn’t receive paychecks from Uber for no reason. Just the fact that you received fare money from Uber proves that you did at least some driving. If you start with the evidence that you do have, you’ll be able to build a story around your rideshare activity.
Do you have any questions about mileage tracking in 2016? How did you track your mileage this year?
-Harry @ RSG
Make Every Mile CountDid you know that every 1,000 business miles can generate $535 in tax deductions? Never miss another mile with the new QuickBooks Self-Employed automatic mileage tracker.
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