The beauty of delivering for Uber Eats is it’s pretty easy to make extra money quickly.
In fact, it’s so easy that all of a sudden, you realize you have to pay taxes on that money.
What’s the big deal about taxes? Isn’t it just like with any other job?
There’s the problem: This isn’t a job. Technically according to your contract and according to the IRS, you made that money as a business. We’re talking about business taxes here.
For a lot of us, things just got really intimidating with that realization. This feels like more than we signed up for, doesn’t it?
But here’s the thing: Taxes for Uber Eats don’t have to be that difficult. They’re not this super secret mystery that so many people make it out to be.
That’s why I wanted to put this guide together. I think it’s possible to understand how it all works. And then when you know how it works, you get a better idea what to expect. That lets you plan and prepare for tax season.
We’re going to talk about nine important tax concepts. None of them are that difficult. Each concept will make it easier to understand how Uber Eats taxes work.
Important disclaimers before we go any further:
First of all, this is not tax advice. I am not a tax professional. This article is meant to provide information and help you understand how taxes work. One of the reasons taxes seem so mysterious is that everyone’s financial situation is different. For that reason, for advice for your specific tax situation, you should seek out a tax professional.
Second, this article is specifically written about taxes in the United States. Every country does taxes differently. A lot of these concepts are similar in other countries, however if you are looking for more specific information about how taxes work for Uber Eats drivers in other countries, you may need to find more information specific to your country.
Finally, while the title and focus of this article is on Uber Eats taxes, these concepts apply to just about any independent contractor gig. Taxes for Doordash, Grubhub, Instacart, and all the other platforms are pretty much the same thing. There’s a lot of similarity for rideshare drivers as well. I decided to make this series because there are a few things that are kind of quirky about how Uber does things for their rideshare and delivery contractors.
About this article series
So what’s a guy who’s not a tax professional doing writing a series of tax articles?
I’m writing this because I don’t think taxes are as complicated as we make them out to be. If a guy like me who’s been delivering for Uber Eats and several others for several years can get how it works, I think anyone can.
And then I see people putting out tax articles and graphics that just get it wrong. Some don’t seem to understand where delivery is different than rideshare. And others skip over how there are some things about Uber Eats that are different from other food delivery services.
Finally, most of the information out there is too simple. It’s always just this big overview and too often, they leave a lot more questions than they answer. Great, I can write off mileage, but what miles can I write off? What’s the best way to track and what if I forgot to track?
That’s why this is the first article in a series. This article will give you an overview of how taxes work. Then we’ll have several articles that go into more detail.
As you read through this, you’ll find links to other articles in the tax series that go into more detail about the particular topics. Sometimes we’ll link to other articles on this site that already address the topic. At the end of this article we’ll provide a list of the other articles in this series.
Nine Important Concepts to Help you Understand Uber Eats Taxes
If you undestand these nine things, Ubereats taxes start to make a bit more sense. It won’t make you an expert by any means, but it makes sense.
And when the tax process makes sense, you get a better idea what to expect. Knowing lets you plan and prepare.
And then all of a sudden it’s not so intimidating. You don’t get blindsided on tax day. It helps you make decisions that help you keep your taxes down.
Here are the 9 important concepts you need to know about taxes as an Uber Eats delivery contractor:
- We are taxed as small business owners
- Uber Eats Taxes are based on profits
- What Uber Eats paid you and what they say they paid you are two different numbers
- Your car expenses can reduce your taxable income by thousands
- There are several other business expenses you can write off.
- Schedule C is the most important tax form outside your 1040.
- We have to pay self-employment tax (our version of FICA)
- Profits added to other income determine your income for your tax form
- Income tax bill plus self-employment tax minus payments and credits equals what you pay in (or refund).