Articles, Blog

TurboTax + Lyft: Maximizing Your Rideshare Driver Tax Deductions [Webinar]

TurboTax + Lyft: Maximizing Your Rideshare Driver Tax Deductions [Webinar]

– Hi you guys. My name’s Alexis Hartford, I’m a tax expert here at TurboTax. So TurboTax has partnered with Lyft to help drivers like yourself, an easy and educational way
to prepare their taxes online with TurboTax. So in today’s webinar, what I’m gonna do is I’m going to talk to you a little bit about your taxes as a Rideshare driver. We’re gonna focus in on
those tax write offs. What everybody loves to talk about. In the previous webinar, we talked about how your income is reported
for Rideshare driving. We talked a little bit
about your business. But in this webinar, we’re gonna focus on those tax write offs. I’m gonna do a little in product demo to show you how easy it is to put your expenses in the product. And then we’re gonna go ahead and cut to questions and answers which
I’m sure that you all have. So let’s get started. So being self-employed
comes with a huge perk and that is being able to write
expenses off of your income. So the way it works is that you get income from the person that you’re working for. So that is called your gross income. And then you subtract
expenses off off that income arriving at your net income. And your net income is what
you’re gonna be actually paying taxes on. It’s not the amount that you receive, it’s after you subtract
all of those deductions. So one huge advantage of using TurboTax is that we offer personalized deductions. So in our previous
webinar, I talked about how if you enter in you’re a Rideshare driver, we personalize the experience for you. And I’m gonna show you in a little bit but putting in Rideshare driver, we’re gonna hone in on
every single deduction that a Rideshare driver can actually take. This goes from anywhere from your vehicle all the way down to
your music subscription. So one of the biggest deductions that a Lyft driver has for themselves or anybody in the Rideshare industry is their vehicle. So writing off your car
is a huge tax deduction and it all starts with your mileage. So it is very very very
important to keep track of your mileage. The IRS wants you to keep
track of your business miles and they also want you to keep
track of your personal miles. So you need to keep track of total miles that you drove throughout the year. Now Lyft does a great job at tracking how many miles your riding around while you’re available on the app. But what if you work for
another Rideshare company too like Amazon delivery. They’re not gonna keep
track of that miles. So you are responsible for keeping track of all of your business miles. And that’s where that
outside apps come into play. So QuickBooks Self-Employed offers a great mileage tracker app. Or you can do it the old fashioned
way with a pen and paper. You can keep a notebook in your car and write down all of your miles that you’re taking each day for business. An easy way to keep track of your miles throughout the year is to write down your odometer start at
the beginning of the year and then at the end of the year, just take your odometer end. And then that would be your
miles for the entire year. So remember, there’s two sets of miles that we need to keep track of. One are our business miles. And then the other is the
total miles that you drove throughout the year. Okay so now that we have
our mileage in place, what we wanna do is to talk
about how to write off the car. There’s two ways that you can
actually write off your car. One is by taking what’s called
the standard mileage rate and for 2018, that’s 54.5 cents a mile. So you would take 54.5
cents a mile and times that by your business miles. Or you could take actual expenses. Now actual expenses is a
little more complicated. Actual expenses requires
that you keep track of all of your expenses
that you paid for the car. So those are include things like gas, maintenance, any repairs
that you had to do, all of your oil changes. If you had to get new tires. So you would wanna keep
receipts for all of that stuff. So then what you do, and TurboTax actually
does do this for you, you enter all that information in and then we’re gonna do a comparison on which one is larger. So, for the most part,
for Rideshare drivers, we go ahead and take the standard mileage because that ends up being
better for the Rideshare driver. And then you don’t have to keep
track of all these receipts. Okay now that we’re done talking about our biggest tax deduction, let’s talk about some of the other things that you can write off for
being a Rideshare driver. Let’s turn to our tax summary
and I’m gonna show you a couple things here. So once again, on our tax summary. You see your driving totals, this is how many rides you’ve driven. Here’s your online miles. So this is the amount of
miles that Lyft tracks while your actually available for pickup or if you have somebody in your car and you’re driving them around. Remember, if you do more than
one Rideshare driving job, you’re gonna put it on one schedule C and you’re gonna add those
other Rideshare miles on top of your Lyft miles. But you wanna make sure
your not double dipping which is why it’s very important for you to be tracking your business and personal miles aside. So if you scroll down to your tax summary, you’re gonna pass your gross earnings, this is the amount of
money that your received. And then you’re gonna come
down to some expenses. So Lyft reports a few expenses for you such as Lyft platform fees, service fees. We’ve got third party fees. These are all things
that you can write off. But there’s a whole
bunch of other expenses that Lyft is not recording here for you. So some of the other things
that you can write off are cellphone, refreshments for your passengers, do you buy them water, candy, gum? Cellphone chargers, car seat covers, air fresheners, anything that you’re
buying for your passengers, you can write off. Just make sure that we keep receipts. So you can keep receipts in
a multiple different ways. You can keep them as a
piece of paper in a shoebox. You can keep them electronically. Let’s say you buy something off of Amazon, you can have an electronic
receipt in your email. And you can also take a
picture of your receipts. By using QuickBooks Self-Employed, we will actually store all
of your electronic receipts for you so you don’t actually have to keep those paper receipts lying around. You can throw them in the trash. The IRS accepts any form of receipt. Paper, electronic, picture, as long as you can substantiate
your business expenses. Okay so now that we’ve
done a little overview of what we can write off as
being a Rideshare driver, I wanna go through the product
and give you a little bit of a demonstration on how easy it is to enter your expenses within TurboTax. So the way that you’re
gonna wanna enter TurboTax is not through If you enter through, you’re to gonna get the free discount. You need to go to your driver dashboard and on the left hand side
where it says tax information, just go ahead and click on there and then you’re gonna come
to 2018 tax information. And you’re gonna see a button
that says get special offers. So go ahead and click on that button. So after you click on
the let’s get started from your Lyft dashboard, you’re gonna arrive at this screen and you’re gonna see two offerings. You’re gonna see TurboTax Self-Employed. That’s the do it yourself software which is what I’m gonna demo today. This one is offered for
free for our Lyft drivers. You’re also gonna see
TurboTaxlive Self-Employed. This is another offering where you can pay and we’re offering it for
half price for Lyft drivers. You can pay to have a
real CPA or EA like myself review your actual tax
return and make sure that it’s accurate and complete. And you can ask any
questions that you may have about your tax return there as well. So for now, we’re just gonna go ahead into the Self-Employed free version because at any point in
time, you can go ahead and upgrade to the live version if you feel like you need
some additional help. But I’m gonna show you how easy it is. So if you already have a TurboTax account, you wanna go here and you wanna sign in and you wanna put in your
username and password. This is gonna transfer
all of your information from last year over to this year. Or if your new to TurboTax, Welcome. And you wanna go ahead
and say start for free and you wanna set up an account, creating a username and a password. So when you get into the TurboTax product, we’re gonna ask you some
very simple questions about your personal info. We’re gonna ask what your name is, what your social security number is, your date of birth, what your occupation is, marital status, and then you’re just gonna jump right in to your income portion. So since you are self-employed, you’re gonna wanna access the topic, Self-employment income and expenses. Now this is my test account, and I’ve already shown
in a previous webinar how to enter income and
set up your business. So from here, we’re just gonna talk about the write off aspect of things. So let me hop over to where we talk about write offs. Alright. So one of the great things about TurboTax as I mentioned before, is that we personalize our experience based on the industry that you work in. So you previously told us that you were a Rideshare driver so we’re gonna farm through
millions of tax returns and figure out what other
Rideshare drivers like you are actually deducting. So if you forget something, it’s okay. We’re most likely gonna
remind you about it here in the product. And I’m gonna show you how cool this is. So we’ve go this section
here called deductions unique to your Rideshare driving work. This is after you’ve set up your business and put in your income. So you wanna go ahead
and select continue there and right now what it’s doing is it’s farming those millions of returns, looking for unique deductions
to Rideshare driving. Alright so now we’ve
arrived at this screen. It’s called what kind
of expenses did you have for Rideshare driving. Now these are personalized expenses. And we’re gonna look through here and you’re gonna see how
they’re personalized. So our number one most common expense as I talked about before is our vehicle. So let’s go ahead and select that because we all have a vehicle
for Rideshare driving. If you scroll down, let’s say you were on the
Lyft Express Drive Program, that’s the rental car program for Lyft. You can go ahead and select
that if you’re on that program. Here we’ve got communications. We talked about cellphone. We’ve got supplies. Let’s say you pay some
type of taxes or license to your city that you live in. You wanna go ahead and
select that box there. And then here’s a big one down here. All these other miscellaneous expenses, the ones I showed you on your Lyft summary down at the bottom. Those would go here. So let’s check all of the boxes on where you actually have expenses. You can look through these
less common expenses too. But for the most part, TurboTax has you covered up
here with these common expenses. Now, here’s your TurboTax dashboard. You can kinda think of it
as your Lyft dashboard. This is your dashboard for
your Rideshare driving info. So your general information
is gonna go up here. I went through this in
the previous webinar so we won’t go through that again today. Additional income, so
this is where you enter in your 1099-K and your 1099-MISC. And then if you scroll down to the bottom, you’re gonna see an expense category. So this is where all of the expenses are that we’re gonna go ahead and enter. So let’s start with your vehicle. I’m gonna walk you
through the vehicle flow and just show you how easy this is. So click on start. Did you use a car or truck
for Rideshare driving? Absolutely. And let’s get some info. So let’s say I drive a Honda Accord. That’s a car under 6000 pounds. And let’s say I started driving in 2017. Tell us about the owner. Are you the owner? Do you lease it? Maybe it’s your parent’s car,
so the vehicle isn’t yours. Was the car available for personal use? Most likely yes. Did you have another vehicle
available for personal use? Depends on if you had another car. In my example, we only had one vehicle. Now, did you keep track
of the miles you drove for your Rideshare driving
work in this Honda Accord? As I mentioned earlier, miles are the base of the Rideshare expenses. It’s your biggest tax deduction. You have to keep track of your miles. So, depending or not whether
your using a mileage log. Maybe your using the
QuickBooks Self-Employed app, you’re gonna say yes, I track
my miles for my vehicle. And then this is where
we enter in our mileage. So previously, I was talking about how you needed to track your miles for the entire year. This includes business and personal. And then it wants to know
what your business miles are. So let’s go ahead and
say that I drove about 25,000 miles for business and personal. And then my business miles only, let’s say we’re about 6000. Continue on. It’s gonna ask you a couple
more wrap up questions about your car. And then we’re gonna get
to a screen that asks if you took the standard
mileage deduction last year. This is a pretty important question. So if you transferred in
your return from last year. We’re already gonna have that information. If you didn’t use TurboTax last year, you can go ahead and click
on this link right here. Where can I find this info? And it’s gonna tell you
here on the right hand side. Exactly where to find the info on your last year’s tax return. So let’s say that I took the
standard mileage last year. So this screen right here is telling us what standard mileage
deduction we actually get from putting in our business miles. So remember, it’s 54.5
cents a mile for 2018. So at this point in time,
you do have a choice and it’s what we had talked about earlier. It’s do you wanna take the
standard mileage deduction or do you wanna go ahead and
put in your actual expenses. And your actual expenses,
like I said previously, are things like auto repair,
gas, tire, oil changes, anything that you did for the maintenance and upkeep of your car. So if you’re confident with
the standard mileage deduction, go ahead and select continue. And then we’ll ask you a
few more wrap up questions on your car. Everybody pays DMV fees right? So you can subtract the personal
property portion of those. You can find that on your DMV form. And there we go. We’ve got a vehicle deduction. Okay, if you used another car for your Rideshare driving work, you can also add that in here as well. Alright so now we’re back at our Rideshare dashboard in TurboTax. And if you scroll down, you’ll see that our vehicle
section is complete. Now we can go into each
of these other sections like communications. Let’s go look at that. This is where we would
put our cellphone bill for our business use portion only. So let’s say I spent 1200 about dollars last year on my cellphone. So I would put in the
business use portion there and go ahead and hit continue. All of those expenses that I showed you on your 2018 Lyft tax summary
are gonna go down here on other miscellaneous expenses. And here’s some examples here for you. So you can see Lyft commissions here. You’d also put music
subscriptions here as well. Okay so now we’re back out here
to our Rideshare dashboard. And as you can see, you can just keep going
into every expense category down here that you previously
told us that you had. If you do forget something, you can always go here to
add expenses for this work. And you can scroll down and you can see most of the expenses here. But TurboTax definitely has you covered and all of the common expenses
that we’re showing you here, are for the Rideshare driving industry. Okay so if you scroll
down on your dashboard after your done doing
all of your expenses, you can go ahead and
hit done at the bottom. And then, you’ll answer a
few follow up questions. And that’s it. It’s extremely simple to use, if you ever need any help,
you can just go up here to the help panel and type in any question that you may have here. Or TurboTax Live is always
available up here as well for live tax advice, half off. Okay so now that we’re done entering in all of our Rideshare
expenses, we’re gonna go ahead and take a break. I’m gonna sign out. TurboTax is gonna serve all
of the information for you so that when you log back in, it’s just right there from whatever device you logged back in from
and we’re gonna go ahead and take some questions
and answers from you guys. So I’m gonna turn it over to Molly to answer questions that
you guys have from online. – Here’s one about car expenses. I had a significant repair this year. Can I take that if I
claim standard mileage. – So can I take a significant car repair if I claim standard mileage. Earlier in the segment, I talked about the difference between standard mileage and actual expenses. So the standard mileage rate for 2018 is 54.5 cents per mile. So what happens is you
take your business miles and you times that by 54.5 cents per mile. Then over here, you add up
all of your actual expenses you had for your car. So that would be your oil changes, your car repairs, your tires, your gas, and then what you wanna do is you wanna take a little comparison, which one is actually higher. So if you are taking a standard
mileage in tax year 2018, that means that you cannot take any of the maintenance
on your car for 2018 since your doing the standard mileage. There’s no double dipping allowed here. – Luckily in product, we
have an estimator tool that will predict which
option is better for you without you having to
tally up your receipts. – That is true. – Okay. What kind of expenses can
I take on my rental car? Can I write off my mileage with that? – Rental car, so for Lyft drivers, you have something called the Lyft, Molly do you know what the quest do you know
– express drive. – Lyft Express Drive, that’s right. Lyft Express Drive. So let’s say you don’t own your car. Lyft has a program where you can actually rent a car from them. Now, being in the business
of Rideshare driving, one of your biggest expenses is your car. Well, since you don’t own your car, your renting your car,
what can you write off? You can write off your rental fees. But you can only write
off the business portion of your rental fees. So let me go ahead in product here and show you exactly where
we would be writing off our rental fees. So earlier in the program, I showed you, a table here on what kind of expenses did you have for Rideshare driving. If you scroll down a little
bit, you’re gonna go ahead and skip over the vehicle one because this is actually
if you own your own vehicle or your lease it. you’re gonna wanna scroll down here to Car and equipment rental. So go ahead and select that guy. And let’s go into that topic
and see what it looks like. So if you scroll down to
car and equipment rental, okay, so Lyft Express Drive, you can go ahead and
put the business portion of your rental expense
down here in this section and then you can also
add the business portion of the gas that you paid while you were using
the rental car driving. So you don’t wanna enter into
the normal vehicle section, you wanna go down here into the special car and equipment rental expenses section to enter your rental vehicle expenses. – Perfect and a way to
do that would be based on your business miles
versus your personal miles to calculate that. – That’s how you figure out
the business use portion of what you can write off. – Perfect. I have a music subscription for Spotify. Can I deduct that. – Great. So Spotify, sure you can deduct that. Are you buying it for the
convenience of your passengers and your car? Write off your Spotify music subscription. Write off your Pandora music subscription. Any music subscription that you have for your Rideshare drivers, you can definitely write off. you’re gonna go ahead and find
that in the expenses area. Down here, right under other
miscellaneous expenses, you’re gonna see something
that says music subscription so just type in what music
subscription that you have and go ahead and put that
dollar amount in there. Make sure you save your receipt. – Next up, are all my
miles on the dashboard the total that I can take? – That’s definitely gonna depend, Molly. So it depends on how many
Rideshare jobs you actually have. So if you’re driving for Lyft and you’re driving for Amazon Delivery, no Lyft is only gonna
report the amount of miles that you drove for them. Lyft reports the amount of miles that you had a passenger in your car and the amount of miles that
you were actually available for a pick up. So if you did have
another Rideshare option, or another Rideshare job, what you need to do is
take your Lyft miles, your on and off trip miles
as we like to call them and add in your other
Rideshare miles on top of that. Now, you wanna make real sure
you don’t overlap miles here because there is an easy
tendency to do that. That’s why it’s really good to get an app, like an outside app. QuickBooks Self-Employed has a great one to where it tracks all of
your miles independently of any Rideshare job that you have. – Alright, looks like we only have time for one more in this webinar. What if I buy clothes to
look more professional. Can I expense those? – Can you wear them out on the street is the typical answer that
comes in from the IRS. So, no you can’t write off any clothing that you can typically
wear out on the street. Clothing in itself is not deductible. There are certain exceptions of course that go along with the
deductibility of clothing. If you need a clown suit, if you’re a circus performer – Or your employer requires it. – If your employer requires it. But just for normal Rideshare driving, if you wanna look a
little more professional, no those clothing unfortunately
aren’t deductible. – Alright. – Okay guys it sounds like
we’re out of time for today. I just wanna thank you
so much for joining us and thanks for watching.

Tagged , , , , , , , , , , , , , , , , , , , , , , , , , ,

59 thoughts on “TurboTax + Lyft: Maximizing Your Rideshare Driver Tax Deductions [Webinar]

  1. I drive for Lyft, but also have a W2 job. Can I still use the self-employed product seeing as I'm not 100% self-employed?

  2. How can I decelerate if I a rent a car with Express Drive? Also what kind of turbo tax works for me, because I was an employee until October, then I became Lyft driver. I need to buy two different turbotax .

  3. If I want to deduct my Spotify and Soundcloud subscriptions, am I supposed to only deduct the percentage I use for business – like internet or cell service? Also, I don't think I get receipts for those, really (Or I have no idea where they're at). Can I prove I paid with bank statements that have the service name or something?

  4. 2018 was my first year for ride sharing. I have been using TT Deluxe for many years and I have already purchased the program for 2018. Will I be able to use that version of TT to report ride share income/expenses or do I have to use the Self-Employed version?

  5. So I rent my car. Can I use the standard mileage deduction option or would I have to the use the car rental feature to deduct my car expenses like rental fees? Or can I use both?

  6. Made 75k with lyft and based on my lyft summary I drove over 50k miles on my car based on my online miles do I get the 54 cent deductible for each mile?

  7. I see someone asked about “lyft commissions” and I understand that is the platform fees. I should add the service fees and the platform fees, correct? On the turbo tax misc should we put commissions like example or list each as it’s called on the summery?

  8. i bought a new car in 2018. How do I change the vehicles in my taxes? Can you guide me to a video I can better understand this part from. I changed cars in June 2018.

  9. I purchased the 2018 turbo tax home and business edition (I don't have a business other than the part-time jobs that I did for Uber, Grubhub, Instacart, & DoorDash), but I also work full-time and have a regular W2, did I buy the right product?

  10. Is food deductible? As a full time driver I at least buy 1-2 fastfood meal if i didn't carry any meals on the go from home because I work 12-15 hours a day?

  11. Also i got into a car accident and had to pay a $1000 deductible with Uber and i had to rent a car for 2 weeks while my car was being repair. Also got a lousey ticket a few months back. And my car got broken in and a theif broke 1 window and i had to repair it and re tint it. Can i file all of that? I report the incident to the police, but they didnt do anything & i had to re buy everything they had stoled. My insurance was a rideshare insurance and i was on a family vacation trip & we thought the rideshare insurance would not cover the incident. I just dont have the money to pay for full coverage and a rideshare all at the same time. I had one heck of a year 🙁

  12. I married a Canadian citizen in 2018.  She is currently living in Canada and I in the U.S.  I am filing Married Separately for.  My wife does not have a Social Security Number.  What do I enter in my Federal Turbo Tax for my wife's SS#?  Thanks.

  13. Mine is not doing the discount. Is it because I already had my taxes submitted & now I’m amending my tax refund (to add my lyft self employment)?

  14. I'm a Lyft Express Drive Renter with unlimited mileage. From Oct. 2, 2018 (my start date) to December 31st, 2018, I never once used my rental for personal use due to the $2500 deductible. Therefore, aren't I entitled to 100% deduction on all of the gasoline monies that I spent during that time??

  15. I received a W2 for 2018 for services rendered on December 2017 and started driving for Lyft on Jan. 15, 2018. I'm afraid this will affect my self-employment income giving me a higher as TT does not provide an option for this situation. Please advise. Thanks!

  16. Great video, thank you! I have one question about vehicle depreciation. I purchase my vehicle for ridesharing in August 2018 and had an extreme amount of repairs done along with having to buy brand new tires before I even started my ride sharing. I ended up selling the vehicle in December 2018. If the vehicle was only used for four months, am I able to depreciate it and charge actual expenses or would it be Best for me to just claim mileage?

  17. I did already my 2018 Tax return using as usual TT Deluxe. I do have W-2 forms as wel, I started driving fo UBER last year in June. Just discovered this FREE self employed version. Would you recommend to redo my taxes on this SE version or I'm OK to file with TT Deluxe. Thank you.

  18. What if I did the express drive and also got my own car later? That's my plan soon. I'm currently renting but will get a car soon.

  19. If I subscribe to Quickbooks/TurboTax, will I be able to access my account via my smart phone and my computer too?

  20. Thank you for the information. I have a question about filing. If I am married and want to file jointly can I sti use the self employed option from turbotax for myself if my spouse works for a company?

  21. Can I use this Turbo Tax offer, having also a W2. Bc most of us have another job. So, how it works? Also, let's say I'll be around $60k with both jobs but Lyft is less than $20k? Thanks.

  22. Under actual car expenses, you forgot a large, very important deduction – DEPRECIATION. Let's say, on a $25,000 auto used exclusively for rideshare, it's 5 year property, so you can take roughly 20% of $25,000 each year. (Not exactly, there's a table the IRS uses). In the example used in the video, rideshare usage is 24.13%. So the deduction would be – $25,000 x 20% x 24.13%. In addition to all other expenses. Plus, interest paid on an auto loan. The Standard Mileage Deduction takes all those into account, and allows you a lump sum of $.545/mile so that's all you can deduct

  23. hello I just started driving for lyft almost 2 months should I start entering my information at this time into turbo tax or wait until april 2020 tyvm I didn't see any other turbo webinars yet tyvm

  24. I didn’t separate miles driven between Uber and Lyft. I just have total miles. What is best way to input miles in this situation?

  25. The interest you paid on your car is deductible also!!! This is one of the reason why you shouldn’t go to turbo, h n r block or liberty to file taxes instead going to the private cpa

Leave a Reply

Your email address will not be published. Required fields are marked *