With tax season full underway, you may be wondering how you should handle your rideshare taxes. One of the easiest and more cost-effective ways to do your taxes is with online tax filing software. RSG contributor Chonce Maddox Rhea breaks down the most popular tax programs for Uber and Lyft drivers below.
With all the information that you receive from Uber, Lyft, and your rideshare mileage tracking data, filing your own taxes will definitely seem doable. Tax prep sites allow you to e-file your taxes directly online or download their software. Either way, you’ll be walked through the process step-by-step given all the latest DIY tax filing programs.
Our top 5 quick hits:
- TurboTax – Uber and Lyft may offer this to you for free, so check your dashboard!
- H&R Block
- Tax Act
- Liberty Tax
Pro-tip: Remember to check out cash-back portals like Rakuten for discounts and deals before submitting payment for your taxes! Rakuten regularly offers cash back or discounts on tax prep software, like this discount of 37% on TaxSlayer! Sign up for Rakuten here.
Why Consider Using Tax Prep Software?
To the untrained eye, filing your own taxes can seem so confusing. I remember during my senior year of high school I took an economics class and we learned how to file taxes.
I studied a lot about the tax code, deductions, specific formulas and other aspects of the process. The only problem I had with the class was that we used a super old-fashioned method – the paper method.
Yes, filing a paper tax return and mailing it in to the IRS is as difficult as it sounds. I’ve long forgotten about the procedures for this method completely, which is completely fine now that e-filing your taxes is now widely accepted and even preferred by the IRS.
Tax prep software programs utilize technology and advanced algorithms to make filing your taxes online a breeze. You don’t have to be a tax professional to use it, although it gives you access to a very similar system that tax preparers use to e-file.
Online tax prep programs guide you step-by-step through choosing which type of return to file, adding all your required information, and knowing which deductions to use so you can get your tax return filed quickly and efficiently.
As long as you have basic computer skills and can follow the prompts, using tax prep software programs will be a breeze. Plus, the fact that they are often cost-effective and you can file your own taxes from home are just additional reasons to consider this method.
With so many different tax prep programs to choose from, you may be wondering what the best options are for rideshare drivers. Here are 5 of the best tax filing programs to consider.
TurboTax is one of the most popular tax filing programs and with good reason. They offer a ‘Self Employment’ tax filing program as well as a wealth of information and tools like their Tax Bracket Calculator and Self Employed Expense Estimator.
Both Uber and Lyft offer Turbo Tax for free to drivers who qualify on the respective partner dashboards. Otherwise, the price is $90 to file or $170 to use Turbo Tax Self Employed Live.
The only difference between the two versions is that the Live tax filing program includes unlimited tax advice and answers from real CPAs.
Again, you can find a ton of information on the site for free. For example, on TurboTax’s self-employment page, you can click your industry from a drop-down menu and learn about which deductions you may qualify for.
If you use Quickbooks Self Employed to track mileage and expenses throughout the year, you can easily import this data to TurboTax as you prepare your taxes.
Another thing I love about TurboTax is that every detail is carefully reviewed. They guarantee their calculations are accurate, which is super helpful for beginners who are new to e-filing.
In fact, if you ever do get audited by the IRS, TurboTax will provide free guidance from a professional and pay any IRS fees, so there’s very little risk on your end.
Get started with TurboTax using our referral link here.
2. H&R Block
H&R Block has tax filing offices all over the country, but you can probably spend less by filing taxes online or downloading their software program.
As a rideshare driver, you’ll want to use their Premium Online tax filing service for $49.99, or Self Employed Online service for $79.99.
Note: RSG users will get a discount on these programs when they sign up for H&R Block using our referral link here!
H&R Block also partners with Stride to help you easily import your mileage and business expenses.
While their premium package includes technical assistance by phone, it doesn’t include importing your Uber driver tax information. I’m not sure if they’d allow you to do this manually, but to be safe, using the Self-Employed Online program will allow you to import your 1099 forms from Uber and Lyft.
Just like TurboTax, H&R Block offers a maximum refund guarantee and a 100% accuracy guarantee. They also provide free audit guidance and support.
Get started with H&R Block using our referral link here!
FreeTaxUSA is an IRS-approved e-file provider and a top-rated tax filing software program. As their name suggests, you can file advanced and simple returns for free no including state fees.
As a rideshare driver, you’d be looking at their free advanced tax filing service. Here is a snapshot of all the situations that qualify.
You can import data from prior tax returns done with TurboTax, H&R Block, and Tax Act and their system will check for over 350 different tax credits and deductions that you may qualify for. Since FreeTaxUSA doesn’t charge for advanced tax returns for contractors, you may be wondering what the catch is.
While they don’t charge for Federal returns and also offer a 100% accuracy guarantee, the company does charge $12.95 for state returns and other additional services they sell. For example, you can pay an additional $6.99 for priority support, audit assistance, amended returns.
However, I did some digging on and the IRS website I see they recommend FreeTaxUSA for a free federal return if:
- Your Adjusted Gross Income is $36,000 or less, AND any age, OR
- You are eligible for the Earned Income Tax Credit, OR
- Free for Active Military for Adjusted Gross Income of $69,000 or less
A lot of other sites like TurboTax will provide free federal returns under these conditions as well since it would likely be a 1040 EZ form, but perhaps TaxFreeUSA waives the fee for all Federal returns regardless of these things.
4. Tax Act
Tax Act offers self-employed tax filing services for $74.95 online and $124.90 to download their software. You can easily import things like income, expenses, depreciation and more while receiving step-by-step guidance for a maximum refund.
While Tax Act says you can complete your federal return in just minutes after importing all your information, they offer year-round tax support and planning along with 7 years of access to a digital copy of your return.
Like TurboTax and H&R Block, Tax Act offers multiple tools and resources to make the tax filing process smoother and more understandable.
5. Liberty Tax
Liberty Tax has their own tax filing online service that is affordable for freelancers and contractors. The best package for rideshare drivers is the Premium service for $44.95.
The Premium package is designed for anyone with self-employment income, business deductions, unreported tips and an overall more complex tax filing system. You’ll decide what aspects of a return you want to work on and can always send your return to a local office for an expert to complete if need be.
Liberty Tax offers all the standard accuracy guarantees, support, and audit guidance along with the ability for you to send your tax return to a local office for a free double-check.
Liberty Tax has an advanced software system that is great for someone who’s been e-filing on their own for a year or two.
One thing I really appreciate about their system is the safeguards they put in place to warn you if you input information that could trigger an audit so you can understand more about how that works.
The Top Tax Programs for Uber and Lyft Drivers
Filing your own rideshare taxes doesn’t have to be a pain with these popular tax filing programs.
Our top choice for drivers hands-down is TurboTax because it’s an easy-to-use system that can potentially be free or discounted for drivers. The fact that you can input expenses with Quickbooks Self Employed is another perk that will make filing taxes super easy.
H&R Block is another strong contender especially if you already use Stride to track mileage and expenses.
Overall, each of these tax filing programs has its perks depending on your needs and situation.
With whichever program you use, make sure you’re taking advantage of all of your deductions and utilizing the support features included in your service package.
Readers, how will you be filing taxes this year? With a program, a CPA or something else?
-Chonce @ RSG
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