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Tax return from another job and Uber taxes?

Discussion in 'Taxes' started by Geno71, Jan 6, 2017.

  1. Geno71

    Geno71 Well-Known Member

    Location:
    Pittsburgh PA
    In a case where Uber/Lyft is a part time "side hustle" (bastards) and a bigger tax return is expected from the main job, do those two (job return and Uber tax payment) get processed at the same time and the taxes owed from ride sharing income are deducted from the total return? I hope I'm making sens, so for exampl:

    If I'm getting say $3000 back in tax return from my day job, and I owe IRS say $500 (just example numbers) from RS income, when I file everything at the same time, does it just get calculated as $3000-$500 and I receive $2500 back? Or will they want me to send them a check for $500 but they will send a $3000 check back? I have some possible car repairs coming up and want to have an idea if I should pay from my savings or use a credit card, depending on how those taxes are handled.

    Does anyone have any experience with situations like this?

    And another question. I watched some vid on Youtube where a lady tried explaining the math behind driving for Uber and how that's a rip off, and she mentioned taxes that driver will have to pay as "up to 10% sales tax". I was under the impression that we're talking about income tax here, like federal, state and local, maybe even social security... which one is it? I was setting aside at least 30% of every RS payment for taxes and maintenance. Is that about right, an overkill or should I be saving more?

    Thanks in advance guys
     
  2. Older Chauffeur

    Older Chauffeur Well-Known Member

    Location:
    Simi Valley Ca
    In very simple terms, it all gets reported together, and if you have taxes due, that amount is taken before any refund is issued.
    Your Uber/Lyft income and expenses get reported on Schedule C (Profit & Loss from Self Employment) and the net gets transferred to your Form 1040, which is where your income from your regular job is listed. The term "return " refers to what you file with the IRS in determining if you owe additional taxes or if you have a "refund" coming from money that you paid in, either by payroll witholding through your employer, or quarterly estimated taxes from self employment.
    With any luck, provided you have kept a detailed record of business use of your car and other expenses, you will have a fairly low net profit, or even a loss.
    There is also the FICA issue, which is a tax you owe on self employment if your net profit is at least $400.00, roughly 15.3% for Social Security and Medicare.
    A tax program such as TurboTax can walk you through it, or you can have a tax professional prepare your tax returns.
    I am not a tax pro, but there are some people on these boards who are.
    I'm not familiar with the sales tax issue, but maybe one of the pros will weigh in.
     
    UberTaxPro likes this.
  3. Geno71

    Geno71 Well-Known Member

    Location:
    Pittsburgh PA
    Thank you for your answer, so to clarify, assuming a refund is due to me greater than taxes owed, what you're saying is that I will just be getting a lower amount since that's my money that IRS already has in first place, right?
     
  4. Older Chauffeur

    Older Chauffeur Well-Known Member

    Location:
    Simi Valley Ca
    Yes, any monies they already have go toward the taxes you owe. If there is money left over, they send you a refund. A lot will depend on what deductions you have, both in the form of business expenses and on the personal side, things like home mortgage interest, medical expenses, education costs, etc. If you were getting a refund in years prior to your ridesharing, you will probably get one now as well. If you pay in enough through witholding it saves you having to pay quarterly for the side gig.
     
    UberTaxPro and Geno71 like this.
  5. Geno71

    Geno71 Well-Known Member

    Location:
    Pittsburgh PA
    Cool, thanks again!
     

  6. Leaf

    Leaf Member

    Location:
    Everywhere
    Driving:
    UberX
    Older ChauffeurOlder Chauffeur , you may not be a CPA, but I have a second question for you.
    Let's say I am the Sole Proprietor of an LLC for another business, so I will have to file 2 Schedules C (one for LLC and one for Ridesharing - Uber+Lyft).

    Will the 2 Schedule C be consider together? In other terms, If I lost money on the LLC will it offset any profit on the Ridesharing?
     
  7. LAuberX

    LAuberX Moderator Moderator

    Location:
    Los Angeles
    Driving:
    UberX
    go to the "taxes" forum for more information.

    #1 rule. write down your odometer every day at the start and end of your "hustle"!

    Tracking ride miles and DEAD miles is the key to having a ZERO tax bill with the lousy Uber pay rates.
     
    UberTaxPro likes this.
  8. UberTaxPro

    UberTaxPro Well-Known Member

    Location:
    CT
    Driving:
    UberX
    Well it depends! First it depends on how you've selected to be taxed for the LLC. Most LLC's are taxed as a pass thru entity but you can select to be taxed as a corporation or partnership for an LLC. IF you're being taxed as a pass thru entity and the businesses are similar ( like one is lyft and the other is uber) then yes you can combine on your schedule C. If the businesses are different in nature you'll need separate C's. If your LLC is being tax as a corporation or partnership you won't be using a schedule C for that business.
     
    Older Chauffeur likes this.
  9. Older Chauffeur

    Older Chauffeur Well-Known Member

    Location:
    Simi Valley Ca
  10. Leaf

    Leaf Member

    Location:
    Everywhere
    Driving:
    UberX
    Way to go UberTaxProUberTaxPro and Older ChauffeurOlder Chauffeur you guys are the men! :D
    Indeed, they are completely different in nature. One is ridesharing and the LLC is for some freelance work. This is not so good since it looks like I will be getting a very limited return compared to previous years. :eek::(
     
    Older Chauffeur likes this.
  11. Older Chauffeur

    Older Chauffeur Well-Known Member

    Location:
    Simi Valley Ca
    By "return" I'm sure you mean refund, which is for most people their own money that was overpaid, either by payroll witholding or estimated quarterly payments. It's in some ways a non-interest bearing forced savings account. So if you didn't pay it in, you had that money to spend through the course of the year. It only gets tricky when you haven't paid in and your taxes due amount exceeds $1000- then they hit you with penalties.o_O
     

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