Uber or Lyft Taxes: What to do Without a 1099 Form
So there were a lot more drivers on Lyft and Uber this year and now many people are a bit worried about their taxes. Here are some other posts about taxes:
- What you can deduct based on the mileage or depreciation deduction
- Do Uber or Lyft Drivers have to pay taxes?
- Lyft and Uber Tax Rates
Some have asked what happens when you don’t get your 1099. Whether you get a 1099 or not, you have to report any income to the IRS. As all transactions are digital and linked to your social security number, any unreported earnings can easily be found by the IRS. An approximate tax rate ranges from 25%-40%, depending on how much deductions you take.
Note that this tax rate includes the Self Employment Tax, which is made up of Social Security and Medicare that adds up to about 15% on top of your state and federal taxes.
According to the IRS rules, below are the ways you will get a 1099 that totals your Uber, Lyft or Sidecar income for tax purposes:
Lyft says there are two different situations they will be sending you a 1099:
- Received more than $600 directly from Lyft (1099-MISC), such as passenger referrals or driver bonuses or driver fare guarantees
- Lyft salary exceeding $20,000 and more than 200 Lyfts in one year (1099-K)
Uber will give you both 1099-K and 1099-MISC regardless of how much you made in either category so you should have both in order to get your taxable income. You can see this post about what to do:
There are many drivers who according to the above rules won’t get a 1099. Just in case you don’t get a 1099, here are a few ways to get your total rideshare income. For all of the below methods, note that you only have to count income that was deposited into your checking account in the calendar year (see Method 3 for more details).
Method 1: Use Lyft Yearly Stats
For Uber, you will get both 1099 so you can use that to calculate your taxable income.
For Lyft, you may not either 1099 if you didn’t meet the above requirements. Here is an example of the 2015 Lyft Yearly Stats:
So here is how you would fill out your taxes:
- For gross income, add up the numbers above “Gross Ride Earnings” and “Non-Ride Earnings”
- Deduct Lyft Commission as an “Commissions and fees” (Line 10, 1040 Schedule C)
Method 2: Personal Records
Keeping track of deposits
I record the weekly deposits I get from Uber and Lyft onto one big spreadsheet. This makes it easy for me to calculate quarterly taxes. At the end of the year, I just add it all up and I know how much I made for every week. There are only 52 weeks in a year and I do this once a week, so it doesn’t take much time.
- For Lyft, you can find your weekly deposit on your weekly summary, or the past few weeks under the History tab of the Driver Portal.
- For Uber, you can find your weekly deposit under invoices on your Uber Dashboard. It goes back quite far so you should be able to find your entire years worth of invoices.
Sidecar App lists the previous transfers to your bank account. You can just write down these amounts and put that into your 1040SE to do your taxes. With Sidecar, you have to manually transfer the money from your Sidecar account to your bank account and it costs 50 cents each time. Many people like this as they can get paid faster, twice a week for example. However, transactions often take a few days to clear so its not as instantaneous as some people think. However, if you drive a lot on Sidecar, getting paid midweek (for the previous week) is a good perk.
Keeping track of fares everyday
Everyday after I do any rides, I go home and record the rides in a Google spreadsheet.
- On Uber, I go to the driver dashboard and copy and paste the data from the Trips Tab.
- On Lyft, I need to wait for my daily summary and then copy that into another sheet in my spreadsheet
- On Sidecar, I will go under my driver app and manually list the rides in another sheet of my spreadsheet
I have a daily total of fares for each service.
Note to add the fares and subtract the commission. Uber’s data is before their commission. Lyft gives you both on the daily summary, the total fare and your take home portion of the fare. In Sidecar, it is after their commission.
I do this because I keep track of my mileage on a daily basis. In 2014, I have kept track of over 12k miles on rideshare, which means I can deduct $6000 from my rideshare earnings, equating to a savings of about $1800 dollars in taxes. It only takes a few minutes everyday.
Method 3: Using Sherpa
I have been using it since it was first released back in March. I was driving a few times a day and submitted my data to Sherpa to help them fine tune their earliest version of the software to what it is today.
They did a good job adding up all the income and showing you how much you made for the year. There are some ongoing issues with loading the Uber data but with their advanced Uber integration, they are able to download the data from your dashboard and come up with your total income that way. Just make sure to check your data to see if the data is correct.
You can use this link to sign up for free: https://www.sherpashare.com/
For tax purposes, you can use the combined income number and doesn’t really matter where it came in from, as long as it was from Uber, Lyft, Sidecar, or any other rideshare service you drive on. Tristian from Zen99 notes that it matters when the money gets deposited into your account. Most of us will be using a cash basis of accounting, so we only get taxed for when the income gets deposited into our accounts during the calendar year.
Method 4: Use Mint to find Rideshare Income
Mint.com is a completely free online resource that helps users organize their finances. Their system integrates with many banks, credit card services, loan lenders, and so many more services. I highly recommend using it to remind you of your credit card payments and keep track of all of your savings and checking accounts.
Once you sync your bank accounts with Mint, you can do a search of each individual account for Lyft, Uber or Sidecar deposits. Click on the Transactions tab on the top of Mint, and then there is a search box under the menu bar.
- Type in Lyft and it’ll autocomplete any transactions with Lyft in it. Midway through the year, they changed the description of the Lyft deposit (its Lyft Des Transfer or Lyft Com Transfer) so you will need to click on one at a time to find all your Lyft income. This way searches for all of your accounts. If you just search for Lyft, it will come up with your passenger rides from your credit cards.
- For Uber, we get paid by Rasier so search for this company. If you type that in, it’ll find all transaction from Uber.
- For Sidecar, just type in Sidecar into the search. It will come up as “Sidecar Transfer Reimbursements.” You can also refer to the driver app to lists your previous deposits.
It will also add up the total net amount on top of the screen. For me, I have all deposits so it shows up as green.
Still Lost about Taxes?
For additional tax resources, check out my online Rideshare Taxes Course for Uber and Lyft Drivers!
What are you doing to add up your income for the year? Have you already started to prepare your taxes?Have more questions about Uber or Lyft? Head on over to our Rideshare Driver Training Course!