These days, booking ridesharing services such as Uber is a necessity. With just a few taps on your phone, you can reach your third business meeting venue for the day or comfortably go home after a late night out on the town. But have you counted the number of Uber rides you’ve taken and the dollars you’ve spent in the past year? The figures are probably high! Ever wondered if you could recoup and turn those Uber ride expenses into tax write-offs?
Well, let’s help clear things out. In this blog, we’ll explore whether you can deduct Uber rides from your taxes and give a sneak peek at how to turn those expenses into tax write-offs.
Can you write off your work-related Uber expenses?
Of course, your Uber rides to the nightclub & other personal trips can’t be written off on your taxes. But what about your work-related travel expenses on Uber? The answer is it depends. Multiple factors may come into play when defining what qualifies as “work-related travel.”
“Commuting” and “work-related travel” may sound similar, but they’re two different things. That’s especially true when we’re talking about tax write-offs. Commuting is merely your daily travel to and from work. Unfortunately, “commuting” in any form isn’t deductible. Whether you use ridesharing services, like Uber or Lyft, or take the bus or train from your house to the office, your commuting miles won’t be considered tax-deductible by the IRS.
On the other hand, “work-related travel” or business miles can be written off. What counts as a business mile? Any time you drive from one place of work to another is a business mile. For instance, your trips between meeting locations or office sites are work-related travel. It also counts if you have to book an Uber to go to a business lunch, make a run to the bank for work purposes, or go to a supplier’s shop to check your company’s monthly orders.
How can you best differentiate your business miles?
Let’s have an example to help you differentiate your business miles from commuting miles.
Say your office is three miles away from your home. But once a week, you leave your office and book an Uber ride to meet a client located seven miles away.
On the day you have a client meeting, you will accumulate 20 miles: three miles to the office, seven miles to the client’s location, seven miles back to the office, and then three miles home. The 14 miles to the client’s location and back are considered business miles. That qualifies because you have to leave a business site to go to another (a client’s location).
What about Uber drivers who rack up a lot of business miles? They can write off a fixed amount per business mile. Plus, the mileage doesn’t only include the passengers’ trips—they can also claim mileage on the way to every new ride request after dropping a passenger.
How can you deduct business miles from your taxes?
The IRS requires accurate records. So you have the keep a detailed log if you want to write off the business miles you’re on while utilizing ridesharing services like Uber. You need documentation stating the purpose of the trip, the destination, and the total ride costs (including tips). That record should cover eligible Uber rides for the entire financial year.
Let AccountantsNow help.
Need assistance in writing off your work-related travel or business miles on your taxes? Let our team of experienced accountants help you. We’ll ensure you receive the maximum tax refunds possible. Contact us now to schedule a one-on-one consultation.