Hey everyone, looking for some clarity because I am totally out of my depth here.
I’m currently receiving SSDI and recently started driving for Uber on the side to help bring in some extra income. When I first started out, I tried Uber's rental program and was paying around $30 a day for an electric car. After about a week, I sat down, did the math, and realized the rental fees were completely eating up my earnings.
To fix that, I went to a local auto auction and bought a used car for $7,800 cash out of pocket to use strictly for my rideshare driving.
Now that I’m looking at the financial side of things, I realize I have absolutely no idea what any of this means for my taxes. Since I spent so much on the car upfront, I’m pretty sure my actual driving business is technically running at a loss right now. Do I even have to file a tax return if I didn't make a net profit?
More importantly, I'm really anxious about how reporting this Uber income is going to affect my SSDI status. I'm terrified that a mistake on my tax forms might accidentally compromise my disability checks or trigger an issue with the government.
If anyone has navigated the combination of rideshare driving, buying a vehicle cash, and managing government benefits, I'd really appreciate some insight into how these two worlds clash. Thanks!
Started driving for Uber while on SSDI and bought a car cash, completely lost on the tax side of this.
byu/acceptablecasualties intax
Posted by acceptablecasualties
3 Comments
Yes, you have to file because Uber will report your income to the IRS and they will assume it’s all profit and tax you on it as such.
Yes, you’re upside down on the car to begin with, but if you only take good offers you will make money.
Take the mileage deduction the first year so that you can take the mileage deduction in subsequent years.
If you expect to owe more than $1k in federal taxes at the end of the year then you need to make estimated quarterly tax payments.
You still have to file a tax return if your net self employment earnings hit 400 dollars even if you are running at a loss
Writing off the car upfront is going to create a massive business loss on paper that schedule c loss can actually work in your favor by offsetting other taxable income you might have if the deduction is bigger than your total income you could end up owing zero federal taxes plus that extra loss carries forward to help you out on your future tax returns but you absolutely cannot assume a tax loss protects your disability benefits from being reviewed social security tracks your work activity completely differently than how the irs calculates your net business profit.