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For-Hire Drivers

Nick Mancini NV1

November 2024

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For-Hire Drivers – Recordkeeping

Taxpayers should have records to support their income and expenses or be able to reconstruct their income and expenses
Counselor may decline to prepare the return if:

Income and expenses are in round numbers
Few or no expenses where expenses would be expected
Few or no records

Note on I/I form any unusual items or information

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For-Hire Drivers – Out of Scope

The Return is out of scope if

Expenses for items more than $2500 and life greater than a year
Total Expenses > $35,000
Employees or contract labor
Carries inventory for sale
Non-cash basis
Expenses for business use of home
Bartering or trade
Net loss on Schedule C
Actual auto expenses (standard mileage only)

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For-Hire Drivers – Income

For-Hire Drivers report earnings on Schedule C

Rideshare: business code: 485990
Delivery Service: business code: 492000

Taxpayers determine their income, mileage and other expenses

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For-Hire Drivers – Income

Income reporting documents

Tax Summary Statement

Income, commissions and fees, and mileage.�Taxpayer needs to print from his/her online account

Form 1099-NEC

Non employee compensation

Form 1099-K

Gross income (same as shown on tax summary) and tax withheld

Cash Received

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Tax Summary Document

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2020

Gross Trip Earnings

Passenger Miles.

Expenses ,Fees & Tax

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Form 1099-NEC

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Raiser LLC

1455 Market St Ste 400

San Francisco, CA 94107

12-345679 123-00-45670

JOHN DOE

123 Main St.

AUSTIN, TX 78737

5603

Enter amount in 1099-NEC then start Schedule C

Tax form may or may not be received.

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Form 1099-K

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Enter box 1a amount on Schedule C as gross payment

Enter tax withheld in Payments and Estimates section

Tax form may or may not be received.

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TaxSlayer Schedule C

Select Schedule C��and enter in first Income field�
Enter expenses into schedule C

Note Selecting Form 1099-K in TaxSlayer will simply take you to Schedule C

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Enter the total of Form(s) 1099-K plus cash income

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For-Hire Drivers – Expenses

Detailed records essential
All expenses must be reported �(see Schedule C instructions & pub 535 Business Expenses)
Standard mileage rate (actual auto expenses are out of scope)

67 cents/mile
Passenger miles + miles between rides
Owned & leased vehicles
Not commuting miles

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For-Hire Drivers – Expenses

Business portion of non-mileage expenses is deductible
Taxpayer to determine percentage

Typically business miles as percentage of total miles

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For Hire Drivers – Expenses

Examples of for hire drivers expenses in addition to usual business expenses

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Uber/Lyft/Grubhub/etc. fees
Device subscription fees
Snacks and water for passengers
Passenger cell phone accessories, such as chargers and cables
Mileage tracking software
Airport fees
Business license
Ride sharing insurance
Dash camera

Cell phone and mount
Flashlights and flares
First aid kit
Roadside assistance plans
Dash camera
Tolls
Parking
Auto loan interest
Auto personal property taxes

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For Hire Drivers – Expenses

Examples of Expenses not Allowed

Gasoline
Oil
Car maintenance and repairs (including collision repair)
Lease payments
Car purchase payment
Car insurance
Vehicle registration fees
Car washes
Meals

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For-Hire Drivers – Quality Review

Review payer tax summary statement �and tax forms (1099-K and 1099-NEC)
Confirm that any cash income was added to Schedule C
Confirm only business portion of expenses claimed
Remind taxpayer to maintain accurate written documentation of mileage and expenses

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For-Hire Drivers – Additional Resources

NTTC Modified Pub 4012

Section D Schedule C Self-Employment Income
Title Page select the link to NTTC Useful Tax Prep Links for Schedule C worksheet

IRS Schedule C instructions and IRS pub 535: Business Expenses
For-Hire Drivers Counselor Tip Sheet NV1 (contains shared ride worksheet)�can be found in the Tax Prep Worksheets and Tips section of the Volunteer website (http://volunteer.nevadataxaide.com )

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For-Hire Drivers

Nick Mancini NV1

November 2024