Rideshare Tax Preparation Checklist

So, you are your own boss (at least part-time) and start driving for a ride-sharing company like Lyft. Use the Lyft tax preparation checklist below to organize your income and deductions to make filing your taxes a breeze. Remember, not all items listed will apply to you, but it will give you a good idea on what you need to report as income and what you can claim as a deduction.

 

Before you start tax preparation:

1. Download and print this checklist as a PDF
2. Place the checklist in a file folder, or attach it to the outside of a folder.
3. As you receive or locate tax documents, place them in the folder and check them off the list.
4. Scratch off anything on the list that doesn’t apply to your tax situation.
5. Enter information and amounts that are not already available on other documents, such as your bank routing number for direct deposit.

Lyft tax preparation checklist

You’ve spent hours gathering all of your receipts and necessary documents to outline your expenses. Now what? For first-timers, making the adjustment from filing taxes as an employee to an independent contractor can seem like a daunting task. Whether this is your first time or your tenth time, this tax preparation checklist will help you maximize your tax deductions. Not every category will apply to you, so just pick those that do, and make sure you have that information available. When you’re ready to prepare your tax return using TurboTax software, you’ll be surprised at how much time you’ll save by organizing your information beforehand. Your Income __1099-MISC __1099-K __Lyft Annual Summary __Any other income records you may have Vehicle Expenses __Mileage (using the Standard Method) OR all other expense below (using the Actual Expenses Method) __Car tool kit __Car wash __Electronic toll transponder __Flashlights and flares __Floor mats __Gasoline __Insurance __Maintenance __Oil change __Parking fees __Portable battery jump pack __Registration fees __Repairs __Snacks and refreshments for your passengers __Tire inflator and pressure gauge __Tires __Tolls __Towing __Vehicle accessories __Vehicle purchases Insurance __Heath care __Long-term care Communication __Cell phone purchase __Cell phone service __Cell phone repairs __Cell phone accessories Commission and Fees __Lyft fees Legal and Professional Fees __Attorney fees __Bookkeeping costs __Tax professional fees Miscellaneous Expenses __Bank charges __Business memberships __Business taxes and licenses __City and airport fees __First aid kit __Office supplies __Other miscellaneous expenses __Roadside assistance plans

Common tax forms for Lyft drivers

The number of transactions and income your business generated will determine which tax forms you receive. (You can find these forms in the Tax information page of the Driver Dashboard.)

• If you earned $600.00 or more in payments, you would receive a 1099-MISC.
• Alternatively, if you had either $20,000 in payments or over 200 transactions, you may receive a 1099-K.

Even if you don’t receive a tax form, you will still need to report your ridesharing income.

• All drivers who earned income on the Lyft platform in 2018, regardless of income amount, will receive a 2018 Annual Summary document which has the info you’ll need to get your taxes filed.

But don’t let these forms or amounts scare you, you are entitled to several deductions, like the miles you drove.

Deducting miles

Lyft may provide you with your mileage information; however, it may not contain the miles you drove from one customer to the next. Be sure to check your records, so that this deduction is not understated. There are two options to deduct your vehicle expenses:

• the actual expenses method or
• the standard mileage method

The standard mileage method requires less record keeping and provides a set rate per mile.

• Currently, the rate is 58 cents per business mile.

If you choose the actual expenses method, you will need to add all the expenses you incurred in the year, such as gas, repairs, oil change, and anything else related to your vehicle that was necessary to perform your ridesharing activity. If the same vehicle is used for personal reasons, only the business portion is deductible. Read Maximizing Tax Deductions for the Business Use of Your Car to get the most out of your miles.

Deducting cell phone expenses

Did you know you can deduct your cell phone expenses? In today’s world, a mobile phone can be indispensable to your business. As a driver for a ridesharing company, the use of a smartphone may be required. These can be deductible if used while working for Lyft:

• purchasing a phone
• paying the bill
• repairs
• buying accessories

If you use your phone for business and personal, you would simply calculate the amount of any services or items used to run the business and allocate that amount to your business expenses.

• For example, if you use the phone 60% of the time working for Lyft, then you can deduct 60% of the costs.
• If mobile phone expenses total $1000, then it would be: $1000 x .60 = $600 – this is how much you can deduct as a business expense

If your phone is a dedicated business phone (meaning, it’s not used at all for personal reasons, but for business only), you can deduct 100% of the costs as a business expense.

Other tax deductions

Did you pay a professional to keep track of your transactions or did you seek legal advice related to your activity? These expenses are tax deductible! As a Lyft driver, you are considered a business owner. That means anything you spend on your business qualifies as a tax-deductible business expense. This can include anything related to your business activity, from paying for bank and software fees to bottled water and snacks. Read Tax Tips for Lyft Drivers: Ridesharing Taxes for more tips on what you can deduct or use the Tax Preparation Checklist below.

First-year auto depreciation deduction

There is also a first-year auto depreciation deduction of up to $18,000 for vehicles (automobiles that weigh 6 tons or less). If you purchased a car that fits this criterion and started using it for business after 2017, you can take advantage of this deduction. Remember, with TurboTax Self Employed, we’ll ask you simple questions and fill out all the right forms so you can maximize your tax deductions and minimize your tax bill. You can also use TurboTax Live where tax experts are available on-demand via one-way video throughout the TurboTax experience. Not only do they provide personalized advice and answers, but also a one-on-one review of your tax return – including the ability to sign and file if needed – so that your taxes are done right.

~turboTax

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