Do you have a lot of medical bills that you pay on each month? Could those medical bills be deducted from your tax bill this year? I was helping my mother take care of all of her finances after my dad passed away. I didn't realize how many bills she had coming in each month for medical treatments that my dad had undergone months, even a year earlier. I started doing some research about medical bills and tax deductions. If you have medical bills, take a minute to read through this blog to gain some knowledge that can help you decide what you can do when tax time comes around.
When you work for a ride sharing app on a regular basis and bring in part or all of your monthly income from ride sharing work, you need to set up some bookkeeping for your business. When you work for a ride sharing app, you are running your own business, and you need to keep track of how you are doing with your business and you need to keep track of expenses so you can properly file your taxes.
#1 Track Your Work Mileage
As a ride sharing driver, one of the most important things you can do is track your mileage. If you use your vehicle for personal use as well as business use, you need to keep a detailed mileage record.
It is not enough to just say that you drove 45 miles on one day, you need to keep track of where you were driving and why you were driving as well. Write down the number of trips you took, the driving required between trips, and the business purpose of any side trips, such as a stop to get gas.
When it comes to your taxes, you can claim each mile that you drove for work. This is often one of the best ways to get money off your taxes for the wear and tear on your personal vehicle.
#2 Keep Track of Vehicle Expenses
Next, keep track of the other expenses that your vehicle incurs. For example, if you have to get a specific license in your state in order to drive others around, include that expense as well. Include the cost of registration and insurance. Keep track of your fuel costs as well. If you lease the vehicle specifically for the use of ride sharing, you may also be able to deduction some of your leasing fees.
Keep accurate and detailed records. Remember to copy your receipts, as the ink tends to fade on receipts over time. Write down why you needed each purpose, and how it helped your business.
#3 Keep Track of Ride Share Fees
Make sure that you are keeping track of ride sharing fees. For example, with each transaction, the ride sharing app takes a set amount or percentage out of the money that you make. Each time you transfer money, you may have to pay a transaction fee. Be sure to keep documentation of all the fees that you pay, as those come out of your earnings.
Also, be sure to keep track of your tips. Tips are treated differently in the accounting process, so write down the portion of each payment that contains a tip.
Find an accountant who has experience working with freelancers and ride sharing apps. Work with accounting services to create a system for keeping track of all of your expenses and income accurately, so tax time will be a breeze for you and your accountant.
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