Discussion in 'Taxes' started by disp350, Jan 5, 2017.
Then what you do you all do for data and texting? How do you track that portion of your bill for TNC use?
This is the IRS, they can say no to anything and everything and do not have to justify it, and they will look for any reason to disallow it. Let's say every call to Lyft and Uber is the exact same, BUT, there's one number that doesn't match up, OH NO, an Uber pax called you..........sorry, it's not 100% anymore.
The explanation I was given by my tax friend is just add up the minutes for Uber/Lyft, and claim that percentage as the amount, since realistically all you are paying for is data, not the minutes or texts, unless you pay by the minute or text.
You do not instill confidence in your advice when you repeatedly mess up simple math....100/800= 1/8= 12.5% not 8%.
My fingers were typing faster than my brain.
Right but data isnt tracked by minutes it's by GB. I pay $30 for a 6GB plan, how do I know how much of that was for TNC use? I have an unlimited text plan but it costs me like $20, do I have to track every text and divide that number by total texts that month to get a % of TNC text use and multiply that % by the $20?
It is my understanding that there is no realistic way to calculate actual GB used, UNLESS, you had a phone that was devoid of all other data users (apps, etc.), and thus the amount used by Uber/Lyft could easily be tracked. Therefore, you take the total minutes used for calling pax, divide that by the total of all minutes used for the month to get the percentage you can deduct. My example from before, if you used 800 total minutes for the month, but only 100 of them were for TNC, then you can only deduct 12.5% of the total bill for that month.
I suppose, you could cross that over and say you used 12.5% of the data for the month, BUT, the IRS is only going to let you claim one or the other, but since with almost all cell plans, you are paying for data, not minutes, either way, you are only going to be able to calculate based on minutes used.
I've never tried to deduct text, I suspect, that would be akin to trying to deduct the cost of emails, the IRS might frown on that, a tax professional would be the better person to ask.
In the case of unlimited data plans or even preplanned data plans (8GB, 32GB etc.) what you pay is a set amount regardless of how much of the data you actually use (unless you exceed your plan amount). In that case I am not sure how to determine "business usage" of the phone. Would it be a factor of how many hours the phone is on and amount of time spent driving for TNC? If you drive 6 hours a day but the phone is on for 24 hours/day is your usage 25%? But wait, I have opted in to getting text messages from Uber notifying me of high surge periods and my phone has to be on to receive those messages, so even though I may not be "driving" or having the driver app running, I am using to the phone to manage my business.
Since there is no specific way to determine data usage by app, you would only be able to calculate it based on phone calls.
I'm far from being any kind of phone expert, but on my iPhone 6 I can look up cellular data use by app for each billing period:
Settings>Cellular>scroll to "use cellular data for" and toggle the apps you want to track. The usage for each app shows under the name. Would this info allow you to establish the percentage of data totals on your bill used for business? My bill shows data used, even though it's included in a data plan.
It would be at the discretion of the IRS if that would work or not.
Well yeah, they decide whether to accept it, but if you can show the Uber app used x-amount and that it's x-% of your total data costs for the year, what's not to like? Similar to showing your miles accrued for business, backed up by your mileage log, but even better because your phone data usage is tracked independently.
It's the IRS, they don't have to accept anything, and they don't have to give you a reason.
I'd say this is the most prudent approach. As long as you don't claim 100%, I don't think this will raise many red flags.
I am deducting 50% of my bill, not sure how they can prove otherwise since the majority of the plan is based on data+line fees etc, and Uber runs on data mostly, we don't use minutes.
Just so you understand, the IRS doesn't have to "prove otherwise." If you are audited, the burden of proof for every item in the return is on you. If you can't show to their satisfaction how you came up with that 50% cell phone deduction, they can disallow all or part of it.
I think you guys want to first see if your mileage rate exceeds your income. If it does, there is no point in doing an itemized deduction. If you do itemized deduction you better have all your receipts and evidence. Im curious if Uber is counting the tolls as income. They should not be doing that! I keep an excel spreadsheet with Earnings, Miles, Fees, Tolls etc and my "real earnings" is my total earnings - total tolls. I wonder if Uber is saying you earned that? No you didnt! The customer paid for that toll by paying you back! Thats not income!
I haven't checked this year's code yet but a word of caution here.....IIRC for a schedule C business, your first year determines your "accounting" practice for the following years. In plain English, if you take standard deduction this year, you can not take actual expenses next year and vice versa, so don't only look at what works best for you for this year but look ahead and analyze if it will work next year based on any changes you may make (work more, work less, etc.)
Yes Uber is including tolls. It is on the 1099. But you deduct this on your schedule C so it all evens out. Plus if you are keeping good records you can also deduct other tolls not reported by Uber. Similar to extra miles not reported by Uber. ie) tolls used on the way to pick up a pax, just like the miles you used on the way to pick someone up.
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