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Over the past few years, rideshare services have taken off, for both passengers and those seeking employment. If you fall into the latter category, you likely enjoy the freedom and flexibility that comes with being a driver. However, when it comes to tax preparation, this career can pose some challenges. To ensure filing is a breeze, follow these steps.

Tax Preparation Tips Every Rideshare Driver Should Know

1. Determine What You Can Deduct

Drivers are considered contract workers, which means they’re responsible for many of their own business expenses. Luckily, most of these costs can be deducted when you file. Work with an accountant to figure out what can be claimed, so you don’t miss important savings. A few common examples include wear and tear on your vehicle, maintenance or repair services, gas for work, drinks or snacks for riders, and payments toward your car lease or loan.

2. Pay Regularly

tax preparationRegular workers usually only have to worry about paying owed taxes once a year. However, if you’re a contractor, you can make quarterly payments to the IRS. Take advantage of this option to avoid owing a large sum in one shot or incurring fees for missed payments.

3. Report Everything

Most rideshare services render all payments through an application, making it easy to store all your income information in one place. However, when it comes to tax preparation, you need to ensure you don’t leave out any additional income, such as those given as a tip. Failing to report this money could lead to fees from the IRS.

 

If you’re a rideshare driver and need help with tax preparation, turn to the professionals at American’s Favorite Insurance & Tax in Desoto, TX. This reputable tax services agency will carefully review all your information to ensure complete compliance with the IRS. Visit their website to learn more about their services, and call (972) 662-8221 to schedule a consultation.

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