Today we have a sponsored post from Intuit on how to use TurboTax Self-Employed to file your rideshare taxes, and how you can use QuickBooks Self-Employed to track your business income and expenses for a year FOR FREE. I’ve used TurboTax since 2007 and QuickBooks Self-Employed since I began driving for Lyft in 2014. You can use our links to get your TurboTax Self-Employed for $89.99 or TurboTax Live Self-Employed for $169.99.
- Get a free copy of TurboTax Self-Employed this year from Uber or Lyft.
- Automatically import your 1099s from Uber and/or Lyft.
- Get a year of QuickBooks Self-Employed for free (if it’s your first year).
Doing rideshare taxes yourself with TurboTax is easier than you think. In fact, it can even be a little fun if you look at it right.
One of the most important things I’ve learned by driving for companies like Uber and Lyft is how to file taxes for my small business operation as a rideshare driver. Learning how to do this for rideshare helped me figure out how to do taxes for any of my gigs or freelance work.
Step 1: Gather Your Forms and Records
Before getting started, you’ll want to gather all your tax forms and other records. Here are the typical tax docs for a rideshare driver:
- Any 1099’s from Uber, Lyft, or any other company you worked for (you can skip this step if you’re okay with auto-importing below)
- Records of your business miles
- Records of your business expenses
Additionally, you should gather other forms unique to your tax situation for your investments, healthcare, other businesses etc. We’re just going to stick to rideshare here though to keep things simple.
Didn’t Keep Great Records?
If you didn’t track your miles 100% or keep the best records, there is no need to panic. Uber and Lyft keep some records of your mileage and QuickBooks Self-Employed has a nifty tool called Expense Finder that will help you uncover your business expenses after you sync your account. QuickBooks Self-Employed can also import and sync your income.
Getting Your 1099’s
Uber, Lyft, DoorDash, Postmates, and most other companies you have worked for will allow you to download your 1099 from the online portal. These 1099’s are what the companies you drove or delivered for TOLD the IRS they paid you. So make sure you get your 1099’s!
Additionally, TurboTax Self-Employed allows you to import your 1099 information directly from Uber or Lyft by logging in. I still recommend grabbing your 1099’s from Uber and Lyft though and double checking what gets imported.
Step 2: Get the Right Version of TurboTax
Whether you realize it or not, you’re a business owner now. So you’re going to have to ditch the free version of TurboTax and spring for something more powerful to put more money in your pockets. That means you will need TurboTax Self-Employed.
You’ll need to choose one of these two Intuit products to file rideshare taxes:
These versions of TurboTax will allow you to file your various 1099’s, giving you the option to Do It Yourself or get the online assisted tax preparation option which connects you to credentialed tax experts for guidance and personalized tax advice.
Additionally, they’ll allow you to file a Schedule C that transforms many of your business expenses into tax deductions. You can also access powerful tools like ExpenseFinder to help you identify business expenses or, to talk to a CPA/EA (Enrolled Agent) if you opt for TurboTax Live.
TurboTax Live Self-Employed
Although it’s a little more expensive, TurboTax Live Self-Employed is a new way of doing taxes that allows you to talk to real tax experts, a CPA or EA, with an average of 15 years of experience so you can get tax advice anytime you need, from wherever you are while you work within TurboTax’s system. You can connect with them via one-way video (you can see them but they can’t see you) using your mobile device or laptop. The beauty is that you have year-round and unlimited access.
TurboTax Live Self-Employed is useful because:
- It allows you to essentially connect to a CPA/EA on demand whenever you have a random tax question from the comfort of your couch or between your rides.
- You have a real person check your homework and review your tax return line-by-line before you are ready to file (and if you want they can even sign and file your return).
- You get personal tax advice on how to maximize industry-specific deductions.
- These CPA’s and EA’s are be available when you need them, in English or Spanish. They’re bilingual.
Most private CPA’s can be expensive so this is kind of like being able to dial one whenever you want for an upfront fixed price. I paid for it last year and will again this year. I use them occasionally to answer tax questions for tax related blog posts here at RSG.
Make Sure You Get Your Free Year Of QuickBooks Self-Employed!
If this is your first year using QuickBooks Self-Employed, you can claim a year of QuickBooks Self-Employed for free (value of ~$120) when you use TurboTax Self-Employed (or TurboTax Live) to file your taxes for 2018. This is a powerful benefit because it instantly makes TurboTax Self-Employed pay for itself.
QuickBooks Self-Employed is robust all on its own. With QBSE, you can track all of your rideshare income, expenses, mileage, estimate your taxes, and in general keep good track of your financials as a driver.
Additionally, you will be able to quickly import ALL of that data to your taxes next year, reducing your filing time and making taxes easier in the process.
Step 3: Business Income & Expenses
This is where TurboTax Self-Employed really begins to pay off. You might see some big scary red numbers in the beginning after you enter your income, but don’t worry! Those numbers will begin to go down after we start entering business expenses and (in Step 4) personal deductions.
First, navigate to Income & Expenses within TurboTax Self-Employed. From there, click on the drop-down menu, and then click on “Start”.
Importing Your 1099’s From Uber and Lyft
If you drove for Uber or Lyft, you can link your driver account to TurboTax Self-Employed and import your 1099 data from either company directly. It’s an extremely convenient feature that saves time and prevents fat-finger entry errors.
If you prefer to enter your 1099’s manually or worked for a company that doesn’t sync with TurboTax Self-Employed, you can click “Skip Import” and proceed to enter your respective 1099 within TurboTax Self-Employed:
What About Commission Fees?
Add the commission paid to Uber or Lyft under miscellaneous expenses in the next section.
Seeing scary numbers?
Turbo is going to say you owe a lot after you complete this step. This is because the software only sees your income so far without any deductions. These numbers will go down though once you start adding expenses to your Schedule C.
Step 4: Adding Expenses & Building a Strong Schedule C
The Schedule C is an important form that lists your business income and expenses. In theory, what you pay in taxes is based on how much you made in profit. The Schedule C lists your business income and then lists the expenses to justify many of your business deductions. This form is one of the most powerful forms in reducing your tax liability.
Schedule C deductions are extra powerful because not only do they reduce your federal income tax liability, but they also reduce how much you end up paying in Social Security, FICA, and Self-Employment taxes too!
Common rideshare expenses that can be turned into deductions include:
Did You Track Your Mileage?
Each business mile you can deduct will earn you $0.545 in deductions for 2018. Note though that you cannot deduct miles if you rented your car to drive for rideshare.
It is realistic for a full-time rideshare driver to take $35,000+ in mileage deductions alone after driving 70,000 miles in a year for business.
If you didn’t meticulously track your mileage, you can still do some things to take the Standard Mileage Deduction. For example:
- You can use the miles that Uber and Lyft provide in a yearly report.
- You can go back and estimate your business miles based on a normal week of business operations and project them based off of your odometer.
Make it easier in the future
QuickBooks Self-Employed has very precise automatic mileage tracking, and you should absolutely use it to keep accurate records of your business miles. The app makes it easy to distinguish between personal and business miles, all from your phone and with an app that doesn’t waste your battery.
Step 5: Deductions & Credits AKA Your Personal Stuff
Once you get done handling the business and rideshare stuff within TurboTax Self-Employed, you will end up moving on to personal deductions and credits. Everyone’s situation is different so it would be difficult to tell you what to specifically watch out for.
Fortunately, TurboTax Self-Employed is Intuit’s top-shelf tax product, so you should be able handle anything regarding your retirement, investment, investment income, healthcare, mortgage deductions, offshore bank accounts, and personal yacht deductions.
Here are some common things to look out for if you’re a rideshare driver:
- You and your family
- Charitable donations
- Your home (if you live in the Bay Area you can probably just skip this part).
Step 6: Final Steps & Filing Your Taxes
You’ve done most of the hardest stuff in filing your taxes and are well on your way to being done now. Congrats!
There’s just a few more things you need to do from here:
The Affordable Care Act/ACA/Health coverage: Answer some questions, enter your 1095-A if you have it.
Have a CPA/EA Check Your Homework Before You File
- If you opted for TurboTax Live, right now would be a good time to get that Live help to check your homework so far!
- Write down all your questions. Then ask them!
- Resolve any problems found in TurboTax’s error check.
- Sign and file.
Bonus Round: Get A Free Year’s Worth of QuickBooks Self-Employed
You can get QuickBooks Self-Employed for a year free if you use any TurboTax Self-Employed offerings. Here’s how to make sure you get the most from that:
- Pay for your 2018 TurboTax Self-Employed or TurboTax Live Self-Employed return by 4/15/19.
- Sign in at least TWICE and access your QuickBooks Self-Employed account via mobile app or at https://selfemployed.intuit.com/turbotax at by 7/15/19.
- Offer is not valid for those already using QuickBooks Self-Employed on a monthly payment plan, which makes me sad because I pay for QuickBooks Self-Employed (at least it’s a business deduction).
Quickbooks Self-Employed is a powerful toolbox for drivers throughout the year. Here’s some of what it does:
- Automatic mileage tracking (highly accurate, low battery use).
- Connect bank accounts, record business income and expenses.
- Create “rules” that automatically file your expenses under the right business category as they happen in real time.
- Estimate taxes for quarterly payments.
- Create and send invoices for other side-hustles or business needs.
- Sync and Import all of these records into TurboTax next year for taxes.
- Cool dashboards and reports that provide real-time insight into your actual net income and expenses.
- Run reports on Profit & Loss, Tax Summary, Receipts, and Tax Details for your operation.
In other words, you should get it!
Congratulations. You’re All Done!
You’ve filed your rideshare taxes with TurboTax Self-Employed and now you’ve setup QuickBooks Self-Employed for next year. If you want to learn more about Self-Employed taxes, I recommend checking out TurboTax’s blog (also available in Spanish) as it has a lot of useful information and is an all-around good place to read up on how taxes work for the Self-Employed.
All you have to do now is stay on top of categorizing your expenses and recording your mileage in QuickBooks Self-Employed, and you’ll be on your way to doing this much faster in the future!
Readers, what do you use to file your taxes?
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-Christian @ RSG