Amazon is one of the most trafficked&nbsp;e-commerce&nbsp;marketplaces on the Internet. Selling there can increase your bottom line, which can also increase your tax responsibilities.
Using Amazon to sell goods or services means routing many of your platforms and transactions through Amazon itself, especially with Fulfillment by Amazon (FBA). This introduces complex variables into the accounting process, which can affect your taxes in ways you might not have anticipated.
Use this article to learn:&nbsp;
<ul>
 <li>
 How&nbsp;Amazon sellers&nbsp;are classified by the Internal Revenue Service (IRS)
 </li>
 <li>
 What type of taxes&nbsp;Amazon sellers&nbsp;need to pay
 </li>
 <li>
 When should&nbsp;Amazon sellers&nbsp;pay taxes
 </li>
</ul>
<h2>You’ll Need a 1099-K</h2>
If your Amazon&nbsp;e-commerce business&nbsp;received $5,000 or more in total payments in 2024, Amazon will issue you&nbsp;IRS&nbsp;Form 1099-K, Payment Card and Third Party Network Transactions. View&nbsp;gross sales&nbsp;information in your&nbsp;Amazon sales tax report.
The payment threshold to file will continue to decline. <a href="https://www.irs.gov/newsroom/irs-provides-transition-relief-for-third-party-settlement-organizations-form-1099-k-threshold-is-5000-for-calendar-year-2024" target="_blank">If you receive $2,500 or more in 2025 and $600 or more in 2026</a>, Amazon will issue 1099-K forms for those tax years.
<h3>What is a 1099-K?</h3>
IRS&nbsp;Form 1099-K reports transactions made through third-party payment networks like Amazon.
When you have a&nbsp;seller account&nbsp;on the platform, Amazon receives and processes customer payments through payment systems like PayPal, a debit card, or any other means. Once processed, Amazon distributes the proper share of that payment to you. Amazon functions in this way as a third-party payment network between you and your customer, and they report the money they’ve processed through the 1099-K.
<h3>Who Does Amazon Send the 1099-K to?</h3>
Amazon will generate and send&nbsp;IRS&nbsp;Form 1099-K directly to your business by the end of January. You can receive this form electronically or in the mail.If you don't receive your&nbsp;tax forms&nbsp;from Amazon by the end of January, you can download the paperwork and other pertinent documentation directly from your account.
<h3>What do I do if my 1099-K is Inaccurate?</h3>
The information on&nbsp;IRS&nbsp;Form 1099-K is used to prepare your business&nbsp;tax return. This information must be an accurate reflection of your sales performance on Amazon. Inaccurate tax payments and missed deadlines can lead to penalties and increased&nbsp;IRS&nbsp;scrutiny.
If you notice an error on&nbsp;IRS&nbsp;Form 1099-K, log in to&nbsp;Amazon Seller Central&nbsp;in your&nbsp;Amazon account&nbsp;or contact Amazon support immediately and work with them on corrections and updates. View this hub as a&nbsp;central account&nbsp;for your Amazon selling operations.
<h2>File&nbsp;Schedule C&nbsp;as a Small Business</h2>
When preparing your annual&nbsp;income tax return, most&nbsp;Amazon sellers/FBA sellers&nbsp;must also file a&nbsp;Schedule C, Profit or Loss from Business, attached to Form 1040, the standard personal&nbsp;tax return.&nbsp;
Even if selling goods on Amazon is only a side gig, the money you earn counts as income you receive as a small&nbsp;business owner, whether or not you have a registered business or license. Filling out&nbsp;Schedule C&nbsp;allows you to file that self-employment income easily.
If you have not made an entity election for your business,&nbsp;<a href="https://www.irs.gov/faqs/small-business-self-employed-other-business/entities/entities-3#:~:text=Only%20one%20owner%2C%20the%20IRS,it%20treated%20as%20a%20corporation." target="_blank">the IRS will treat it as a sole proprietorship</a>&nbsp;if you're the sole owner and a partnership if two or more people own your business. &nbsp;
<h2>Maximize Your&nbsp;Tax Deductions</h2>
Filing&nbsp;Schedule C&nbsp;allows you to report that income as a business and provides opportunities to reduce your taxable income. As an independent small business, you can keep track of all the money you spend to keep your&nbsp;Amazon business&nbsp;going, and then you can claim those expenses as self-employment&nbsp;tax deductions.&nbsp;
Tax deductions&nbsp;work by subtracting&nbsp;business expenses&nbsp;directly from your taxable income. This will lower the taxes you owe and potentially even bring you down to a lower tax bracket. Here are just a few of the&nbsp;business expenses&nbsp;you can claim as deductions to offset your revenue:
<ul>
 <li>
 Amazon seller&nbsp;fees
 </li>
 <li>
 Packaging and&nbsp;shipping costs/shipping fees
 </li>
 <li>
 Advertising on Amazon
 </li>
 <li>
 Home office&nbsp;supplies&nbsp;
 </li>
 <li>
 Mileage tracking&nbsp;subscriptions
 </li>
 <li>
 Employee salaries
 </li>
 <li>
 Office rent and maintenance
 </li>
 <li>
 Healthcare premiums&nbsp;
 </li>
 <li>
 Retirement savings contributions&nbsp;
 </li>
 <li>
 Professional service fees&nbsp;
 </li>
</ul>
<h2>Does&nbsp;Amazon Collect Sales Tax&nbsp;for Sellers?</h2>
Most states, including&nbsp;California&nbsp;and New York, have a Marketplace Facilitator or Marketplace Fairness law that ensures marketplaces like Amazon and&nbsp;eBay&nbsp;are responsible for collecting and&nbsp;remitting&nbsp;sales on behalf of sellers.&nbsp;Delaware, Alaska, and New Hampshire are some of the states that lack these laws. Check with local authorities to ensure your state has&nbsp;sales tax collectionMarketplace Facilitator laws&nbsp;in place.
While it's Amazon's responsibility to&nbsp;collect sales tax&nbsp;on your behalf, you must inform the platform where and how to apply sales tax in different areas for different customers. Your specific sales tax requirements in each&nbsp;jurisdiction&nbsp;will depend on having a&nbsp;sales tax nexus&nbsp;in that state. This is determined differently for&nbsp;Amazon FBA sellers.
If sales on Amazon meet eligibility requirements, you will receive&nbsp;IRS&nbsp;Form 1099-K from the platform detailing Amazon&nbsp;marketplace tax collection.
<h2>An Accountant is Your Best Tool to Lower Your Tax Bill</h2>
As your&nbsp;online business&nbsp;grows, so too will your tax responsibilities. If you don't take every&nbsp;tax deduction&nbsp;your&nbsp;Amazon business&nbsp;is entitled to, among other necessary steps to manage your business taxes, you might be paying more money to the&nbsp;IRS&nbsp;and other authorities than you have to.
Fortunately, with&nbsp;<a href="https://1800accountant.com/services/industry/amazon-sellers" target="_self">1-800Accountant's CPA services for Amazon business finances</a>, you don’t have to figure out your&nbsp;economic nexus,&nbsp;sales tax rate, and the latest&nbsp;tax laws,&nbsp;tax information, and&nbsp;tax obligations&nbsp;yourself. When you work with 1-800Accountant, our&nbsp;tax professionals&nbsp;handle all&nbsp;Amazon seller tax&nbsp;requirements, including withholding the correct&nbsp;amount of tax&nbsp;for your&nbsp;Amazon productssales tax return&nbsp;and guidance on obtaining&nbsp;sales tax permits&nbsp;before you&nbsp;file taxes.
Schedule a quick consultation–usually 30 minutes or less—to learn more.

Amazon is one of the most trafficked e-commerce marketplaces on the Internet. Selling there can increase your bottom line, which can also increase your tax responsibilities […]

5things-rectangle.png

5 Things You Need to Know About Taxes for Amazon Sellers

Dashers must understand whether and how to report their DoorDash earnings, when to file taxes, and how much to pay […]

Doordash-rectangle.png

Do You Have to File Taxes for DoorDash?

It's a critical practice to take advantage of every deduction you're entitled to in pursuit of a minimal tax burden. Deductions are available if you drive for a living or use your vehicle to support your small business. But what if you don't own the vehicle you operate— <a href="https://www.nerdwallet.com/article/taxes/self-employment-tax-deductions" target="_blank">are self-employed individuals and other entrepreneurs</a> able to write off expenses associated with operating a leased car?Use this blog to learn whether <a href="https://1800accountant.com/blog/car-small-business-tax-deduction">leased vehicles qualify for tax deductions</a> and other critical information every small business owner and entrepreneur should consider.&nbsp;&nbsp;<h2>Can You Write Off a Leased Car?</h2>There are write-offs that self-employed individuals and entrepreneurs who use a leased vehicle for their businesses can take advantage of. Typically, qualifications set by the IRS must be met to claim a write-off successfully. It's a best practice to retain paperwork and other documentation that supports the write-offs you'll claim, such as a mileage log.Unlike small business owners, <a href="https://1800accountant.com/blog/why-small-businesses-often-need-more-than-one-insurance-policy">W-2 employees cannot write off car expenses</a> related to a vehicle they lease. However, employers will sometimes reimburse employees who use personal vehicles for business tasks, such as picking up supplies.&nbsp;<h2>Taxes, Tax Write-Offs and Car Leases</h2>While self-employed individuals and entrepreneurs can take advantage of <a href="https://1800accountant.com/blog/rideshare-driver-tax-deductions">write-offs related to their leased vehicles</a>, there are limits. For example, write-offs don't apply to vehicles when used for personal purposes. If the vehicle is used personally and professionally, you can write off expenses related to that business use. Retaining records, receipts, and other supporting documentation is essential when writing off costs associated with this type of dual operation.You can also write off expenses for a vehicle used exclusively for business purposes.&nbsp;<h3>Leasing an Electric Vehicle</h3>While the Inflation Reduction Act created a path to claim a $7,500 tax credit for leased electric vehicles, <a href="https://www.cnbc.com/2024/07/18/loophole-may-get-you-a-7500-tax-credit-for-leasing-an-ev.html" target="_blank">business owners and entrepreneurs don't typically benefit</a>. The credit for leased electric vehicles applies to the entity leasing it to your business.While the $7,500 tax credit for electric vehicle purchases may go away, it's still available in early 2025 if you meet stringent criteria, including pricing standards and battery sourcing requirements. The vehicle must also be made in North America. Certain states – California in particular – have additional standards for electric vehicle ownership. To qualify for California's electric vehicle tax credit, you must plan to own the vehicle for at least 30 months.<h3>Standard Lease vs. Lease to Own</h3>If you lease a vehicle for your business, you can deduct monthly lease payments via the actual expense method. The amount you can deduct depends on the percentage the vehicle is used for business activities. You are unable to deduct lease payments if you've entered into a lease-to-own contract.<h4>Deduction Methods</h4><ul><li><a href="https://1800accountant.com/blog/tax-deductions-food-delivery-drivers">The standard deduction allows</a> business owners to lower their taxable income instead of having to tally up their actual expenses, which is also known as itemizing deductions. Formally, the standard deduction is the portion of income that is not subject to tax.</li><li>Most low- to middle-income earners will claim the standard deduction, as it equals more than their expenses if itemized. Higher-income earners tend to have more expenses and are likelier to itemize and deduct their individual expenses. This is the method you will use to write off your lease payments.&nbsp;</li></ul><h2>Leasing a Car vs. Buying: Tax Implications</h2>There are <a href="https://1800accountant.com/blog/trucker-taxes-excise-tax">tax implications to leasing or buying a vehicle</a> and other matters self-employed individuals and small business owners should consider. For instance, owning a business vehicle entitles you to more substantial tax benefits, while lower costs can be associated with leasing.<h3>Sales Tax</h3>If you purchase and operate a vehicle for business use, you can deduct the sales tax you paid at the time of sale. This deduction may only be taken once if you purchase a vehicle. If you lease a car for business, you can deduct the <a href="https://1800accountant.com/blog/rideshare-drivers-taxes">sales tax that is applied to your monthly payments</a>.<h3>Tax Deductions</h3>Writing off <a href="https://1800accountant.com/blog/engineer-tax-deductions">monthly lease payments is a deduction exclusively available</a> to businesses that lease. Deductions are also available to businesses that purchase vehicles to support their operations, including:&nbsp;<ul><li>Depreciation. The depreciation deduction allows you to write off a portion of your business vehicle's cost over time. You have a choice of how you'd like to take this deduction for your new car. The Modified Accelerated Cost Recovery System, or MACRS, is a calculation method that favors large deductions early on, followed by smaller deductions. The straight line calculation method allows you to take deductions evenly.&nbsp;&nbsp;</li><li>Vehicle loan. If you've taken out a loan to purchase your business vehicle, you can write off the interest you pay associated with the loan. If you use the vehicle partially for personal use, you can only deduct the portion you use for business. For example, if you drive your work vehicle half the time for personal use, you can deduct 50% of the car loan interest that you drove for work.&nbsp;</li></ul>You can take advantage of other deductions whether you lease or purchase a vehicle for business use. These deductions include:<ul><li>Mileage. You can deduct the number of business miles you've driven while operating your vehicle for business use via the mileage deduction. The standard mileage rate for 2024 is 67 cents per mile, increasing to 70 cents in 2025. While recording accurate mileage was a chore, smartphone applications, such as 1-800Accountant's mobile app, allow for easy and accurate mileage recording.</li><li>Operating expenses. You can deduct business expenses for operating and maintaining your vehicle, including fuel, oil changes, and repairs.&nbsp;</li></ul><h2>Talk to Experts About How to Write Off a Leased Car</h2>We understand if leasing your business vehicle from a tax perspective drives you up a wall.Leasing a vehicle can be a significant expense, which is why many small business owners and entrepreneurs trust 1-800Accountant, America's leading virtual accounting firm, <a href="https://1800accountant.com/blog/rideshare-driver-tax-guide">for financial guidance</a>.Whether you need <a href="https://1800accountant.com/services/small-business-taxes">business tax preparation</a>, <a href="https://1800accountant.com/services/business-tax-advisory">tax advisory</a>, or any of our professional accounting services, we have the affordable solutions you need to ensure your business remains compliant with a minimal tax liability. Schedule a quick consultation–usually 30 minutes or less—to learn more.

Use this blog to learn whether leased vehicles qualify for tax deductions and other critical information every small business owner and entrepreneur should consider […]

carlease-landscape.png

Can You Write off a Leased Car? Your Tax Questions Answered

The rise of the gig economy has opened up numerous opportunities for motivated individuals who prefer to work outside the confines of more traditional W-2 employment. Large companies like Uber, Lyft, and DoorDash are synonymous with gig work, but other well-known businesses are making an impact.If you've placed an order for delivery with Walmart, chances are it was delivered to your residence <a href="https://1800accountant.com/blog/how-to-file-taxes-independent-contractor">by an independent contractor on the Spark Driver platform</a>. Launched in 2018, the Spark Driver platform has worked with hundreds of thousands of independent contractors to fulfill orders from customers in urban, suburban, and rural locations. Over time, the Spark Driver platform has become Walmart's largest local delivery provider.&nbsp;While many individuals enjoy the flexibility of gig work, there are increased tax responsibilities associated with being your own boss. Key takeaways for Spark drivers include:<ul><li>Learn about the taxes you'll have to pay in connection with this work</li><li>How to keep proper records in support of your finances</li><li>Discover the top expense deductions for Spark drivers</li><li>Determine the forms and information required to file your taxes&nbsp;</li></ul>Some of this guidance applies to other gig work you might perform outside of the Spark Driver platform.&nbsp;&nbsp;<h2>What Taxes Do Walmart Spark Driver Drivers Pay?</h2><a href="https://www.nerdwallet.com/article/finance/what-gig-workers-need-to-know-about-taxes" target="_blank">Whether full-time or part-time, gig workers</a> must file a tax return if their net earnings are $400 or more annually.<h3>Self-Employment Taxes</h3>Gig workers will be responsible for <a href="https://1800accountant.com/blog/self-employment-tax-2">paying a self-employment tax</a>, which funds Medicare and Social Security. The IRS set the self-employment tax rate at 15.3%, which is the sum of two parts: a 12.4% Social Security tax rate and a 2.9% Medicare tax rate.&nbsp;Employers usually pay Medicare and Social Security taxes through <a href="https://1800accountant.com/blog/1099-vs-w2">FICA on behalf of their W-2 employees</a>. They withhold wages to pay half of the tax and are obligated to pay the other half themselves.&nbsp;<h3>Federal Income Tax</h3>You will be responsible for paying federal income tax, which is done via your Schedule C form to report profits and losses. Schedule C consists of five parts:&nbsp;<ul><li>Income. List all business income, including gross receipts or sales, returns and allowances, and federal and state fuel tax credits. This calculates your gross profit and gross income.</li><li>Expenses. Report business expenses such as cost of travel, utilities, insurance, and advertising. Subtract your total expenses from your gross income to find your net profit or loss. Report this result on IRS Form 1040.</li><li>Cost of Goods Sold. If your business doesn't require you to purchase inventory or sell products, this section doesn't apply to you.</li><li>Vehicle Expenses. If claiming deductions for car or truck expenses, complete this section. Keep detailed records of your mileage and vehicle expenses during the tax year.</li><li>Other Expenses. Report any expenses that weren't listed above in the second part. Some of these expenses might include education or costs related to your industry.</li></ul>You will attach your completed Schedule C to IRS Form 1040 and file your taxes.&nbsp;<h3>State and Local Income Tax</h3>The state and local income taxes Spark drivers may be responsible for can vary by location. Because Spark drivers are independent contractors, they'll make quarterly estimated tax payments four times per year. Many states that require quarterly tax payments adhere to the same schedule as federal estimated tax payments.If you have questions, contact state and local authorities or seek the advice of a qualified tax professional for expert guidance on your Spark Driver taxes.&nbsp;<h2>What Expenses Can I Deduct From My Walmart Spark Driver Income?</h2>There are numerous deductions that drivers who work with Spark and other platforms can take advantage of. <a href="https://www.gobankingrates.com/money/side-gigs/how-much-do-walmart-spark-delivery-drivers-make/" target="_blank">Some of the top Walmart Spark Driver platform</a> deductions include:&nbsp;<ul><li>Depreciation Expense. You can deduct the cost of business assets, including the vehicle you use as a Spark driver, over time via depreciation. You must follow IRS depreciation rules if the business assets you're writing off exceed $2,500 in value. Numerous factors dictate the amount and duration of your depreciation expense, including the depreciation method you apply.&nbsp;</li><li>Fees. You can write off the fees related to professional services you rely on to complete deliveries for the Spark Driver platform and manage your independent contractor business. Fees that qualify include mileage tracking software, navigation app subscriptions, bookkeeping software, and virtual accounting costs.&nbsp;</li><li>Tolls and Parking. You can deduct the tolls and parking fees you paid while delivering for the Spark Driver platform. Keep receipts from parking lots, garages, and tolls related to your deliveries.</li><li>Phone and Internet. You need your phone to access the Spark Drive mobile application to access deliveries and navigate to your destination. You can deduct part of your bill since your phone service and data costs represent necessary business expenses. Track the portion of your cell phone and data usage related to your deliveries so you can deduct the business-related cost on your tax return.</li><li>Fuel and Maintenance. You can deduct fuel and maintenance costs for your delivery vehicle. As with virtually every deduction, keeping receipts and other supporting documentation is essential.&nbsp;</li></ul><h3>How to Keep Records of Your Walmart Spark Driver Expenses</h3>It is critical to retain supporting documents and records to prepare your tax return and defend your interests during a possible audit. Whether your records are digital, physical, or a combination of the two, they must be kept in a safe and secure location.Keep the following documents to support your Walmart Spark Driver platform expenses:<ul><li><a href="https://1800accountant.com/blog/types-of-1099-tax-forms">IRS Form 1099-NEC</a></li><li>Receipts for business purchases</li><li>Mileage log, including business vs. personal travel</li><li>Vehicle purchase paperwork</li><li>Repairs and maintenance receipts</li><li>Phone usage reports</li><li>Bookkeeping records</li><li>Business license paperwork</li></ul>We recommend reviewing <a href="https://www.irs.gov/businesses/small-businesses-self-employed/recordkeeping" target="_blank">IRS guidance regarding record retention</a>.&nbsp;<h2>How to File Taxes for Your Walmart Spark Driver Earnings</h2>Review the following forms, processes, and deadlines you'll need to be familiar with to file your taxes as part of the Walmart Spark Driver platform.&nbsp;<h3>Required Forms</h3>If you've made $600 or more on the Spark Driver platform in a year, <a href="https://1800accountant.com/blog/freelancing-and-form-1099-nec-everything-you-need-to-know">Walmart will send you&nbsp;</a><a href="https://1800accountant.com/blog/freelancing-and-form-1099-nec-everything-you-need-to-know">IRS Form 1099-NEC, Nonemployee Compensation</a>. This form summarizes earned Spark Driver wages and is essential to filing taxes. Contact the Walmart Spark Driver directly if you do not receive this form by the end of January.You may perform other <a href="https://1800accountant.com/blog/proscons-entity-formation-independent-contractors">work as an independent contractor</a> outside of the Spark Driver platform or are a W-2 employee with Spark deliveries serving as a part-time side gig. In this scenario, you may also receive <a href="https://1800accountant.com/blog/5-tax-issues-that-cause-irs-trouble-for-1099-workers">IRS Form 1099-K</a>, Payment Card and Third Party Network Transactions, and IRS Form W-2, Wage and Income Statement.<h3>Claiming Your Tax Deductions</h3>Use IRS Form 1099-NEC as a supporting document for your tax return. Forms you may use to file your taxes and claim tax deductions include:<ul><li>IRS Form 1040. File Form 1040, U.S. Individual Income Tax Return, to report taxable income and calculate your tax liability for the year.</li><li>IRS Schedule C (Form 1040). Report your income from the Spark Driver platform on IRS Form 1040, Schedule C, Profit or Loss from Business. Schedule C reports your self-employment income and business tax deductions.&nbsp;</li><li>IRS Schedule SE (Form 1040). Form 1040, Schedule SE, Self-Employment Tax, should be used to <a href="https://1800accountant.com/blog/accountant-for-freelancers">report your freelance income</a> and calculate the self-employment tax liability. You’ll also need to pay income taxes, but you can deduct half of your self-employment tax.&nbsp;</li></ul><div class="embedded-entry redactor-component block-entry" type="entry" data-sys-entry-uid="blt79207efd7bb01d06" data-sys-entry-locale="en-us" data-sys-content-type-uid="rte_ad" sys-style-type="block"></div><h3>When to Pay Your Taxes</h3>Self-employed individuals must estimate and pay quarterly estimated taxes throughout the year. Quarterly estimated tax payment due dates for 2025 include:&nbsp;<ul><li>April 15, 2025</li><li>June 16, 2025</li><li>September 15, 2025</li><li>January 15, 2026</li></ul>Use IRS Form 1040-ES, Estimated Taxes for Individuals, to calculate and pay your quarterly estimated taxes. The form includes payment vouchers and instructions for filing online.If you struggle to make accurate calculations by each deadline, our <a href="https://1800accountant.com/services/quarterly-estimated-taxes">full-service quarterly estimated tax solution can help</a>.<h2>Let Our Experts Spark Your Path to Tax Savings</h2>Juggling your tax responsibilities while delivering for Walmart's Spark Driver platform can be challenging. As your delivery business matures and grows, avoiding costly tax mistakes that invite penalties and unwanted scrutiny from the IRS is essential. That's why many drivers and gig workers trust 1-800Accountant, America’s leading virtual accounting firm, <a href="https://1800accountant.com/blog/delivery-driver-tax-return">to deliver maximum tax savings</a>.&nbsp;Whether you need <a href="https://1800accountant.com/services/small-business-taxes">business tax preparation</a>, <a href="https://1800accountant.com/services/business-tax-advisory">tax advisory</a>, or any of our professional accounting services, we have the affordable solutions you need to ensure your self-employed delivery business doesn't spin its wheels. Schedule a quick consultation–usually 30 minutes or less—to learn more.

While many individuals enjoy the flexibility of gig work, there are increased tax responsibilities associated with being your own boss. […]

Walmartspark-landscape.png

Walmart Spark Driver Taxes: Calculations, Deductions & Filing

All eligible&nbsp;<a href="https://1800accountant.com/blog/rideshare-drivers-taxes">rideshare drivers, including Uber and Lyft workers</a>, must file their tax returns as independent, self-employed individuals. This means each driver represents themselves as their own small business, which can make tax preparation and reporting business income more challenging while opening up opportunities for deductions.
As a self-employed worker, deducting business expenses is critical to lower your taxes and to ensure your return is accurate. You can deduct everyday rideshare expenses, including the fees and tolls that Uber and Lyft withhold from your pay. But your most significant tax deductions will be costs related to your vehicle, such as maintenance and depreciation.
You will file taxes as a rideshare driver if you've made $600 or more annually from non-rideshare income, for example, a referral bonus, and $5,000 or more annually in rideshare payments in most states. Uber, Lyft, and other rideshare services will send you IRS Form 1099-NEC for non-rideshare income and IRS Form 1099-K for qualifying rideshare income.
<a href="https://1800accountant.com/blog/rideshare-driver-tax-guide">Uber, Lyft, and other rideshare drivers should read on</a>&nbsp;for more information about essential tax deductions and write-offs that they should take advantage of.&nbsp;
<h2>Top 10 Lyft and Uber Tax Deductions</h2>
Any necessary business expenses may be eligible to be deducted by following strict Internal Revenue Service (IRS) rules that control when and how you would make a claim. Read on to learn about the&nbsp;<a href="https://1800accountant.com/blog/tax-deductions-food-delivery-drivers">top tax deductions for rideshare drivers</a>.&nbsp;
<h3>Mileage</h3>
The IRS allows you to report and claim all fuel and maintenance costs associated with your rideshare work, which requires extensive record-keeping via a mileage log. Instead of claiming specific vehicle use expenses, you can claim a standard preset rate based on your business mileage.&nbsp;
If you want to claim a deduction based on the standard mileage rate, you must do so in the first year you use your car for business purposes. You can switch back and forth between the methods from year to year later on without penalty. For example, you might decide to itemize specific expenses later if your vehicle costs get unusually high.
<h4>Standard Mileage Rate</h4>
The IRS has announced an increase in the&nbsp;<a href="https://www.nerdwallet.com/article/taxes/irs-standard-mileage-rate" target="_blank">standard mileage deduction rate for business use in 2025</a>. The rate for business use has been raised to 70 cents per mile driven. This rate applies to all vehicles used for business purposes, including cars, vans, pickup trucks, and panel trucks.
Using the standard mileage rate will impact the depreciation method you can use for your vehicle.&nbsp;
<h4>Calculating Your Mileage</h4>
Keep a running log of all the miles you drive for your rideshare. Apps and platforms, including 1-800Accountant's mobile application, have mileage tracking functions that make this easy.To calculate your total auto expenses deduction based on the standard rate, multiply your total business miles by the tax year’s mileage rate.
<h3>Mobile Phone Expenses</h3>
Your cell phone is a critical tool you use to access your work on the rideshare platform you work with. You can deduct your phone plan’s cost as a business expense, but only the portion used for business.
You can deduct the entire bill if you only use your phone for work. Otherwise, you will need to divide the bill between your personal and business use. First, focus on how and when you use wireless data for the rideshare app or other work-related purposes, and then continue from there.&nbsp;
<h3>Maintenance and Repair</h3>
You can report different vehicle costs if you decide not to claim a deduction using the standard mileage rate method. An Uber or Lyft driver can claim deductions for routine repairs and maintenance. Small maintenance costs like inspections, tire rotations, and oil changes are all expected costs required for your vehicle’s safe operation.&nbsp;
<h3>Insurance</h3>
<a href="https://1800accountant.com/blog/4-things-know-claiming-self-employment-health-insurance-tax-deduction">Car insurance is another required vehicle expense</a>&nbsp;you can claim if you itemize your vehicle costs. While the rideshare platform's insurance should take precedence when you are on the job, you don't want to leave yourself defenseless if the platform's insurance falls through or doesn't adequately cover your costs.
<h3>Vehicle Registration Fees</h3>
Because your daily work&nbsp;<a href="https://1800accountant.com/blog/car-small-business-tax-deduction">requires you to use your vehicle</a>, you can deduct at least a portion of your vehicle registration fees as a business expense.
<h3>Lease Payments</h3>
If you're leasing or paying off your car purchase, you can claim a portion of those payments as a business expense. You need the car for your work, so you can write off a portion of those costs in proportion to your&nbsp;<a href="https://1800accountant.com/blog/if-i-bought-a-car-can-i-claim-it-on-my-taxes">business use of the vehicle</a>&nbsp;as you drive for Uber, Lyft, or other ridesharing platforms.
<h3>Depreciation</h3>
Depreciation allows you to deduct the wear and tear your car experiences over time. It recognizes that your investment in the car is losing value.If you use the standard mileage rate, you cannot use the Modified Accelerated Cost Recovery System (MACRS) method of depreciation, which generates larger deductions in earlier years and smaller deductions later. Instead, you would have to use the straight line method of depreciation, which creates equal deductions annually.&nbsp;
<h3>Car Washes</h3>
Everything you do to keep your car in good shape is considered a business expense. Keep the receipts and record when you take your vehicle to the car wash or to polish the interior. Those costs are deductible, and your passengers will appreciate the cleanliness of your vehicle.&nbsp;
<h3>Parking and Tolls</h3>
You can deduct tolls and parking fees you paid while driving for your ridesharing service. Keep receipts from parking lots, garages, and tolls related to your work.
<h3>Other Business Expenses</h3>
USB charging stations/chargers, snacks, and other common rideshare amenities are considered non-vehicle business expenses that can be written off.
You can also write off fees related to professional services you rely on to transport passengers and manage your business. Eligible fees include mileage tracking software, navigation app subscriptions, bookkeeping and expense management software, and virtual accounting costs that help maximize your tax savings.&nbsp;
<h2>Do Lyft and Uber Drivers Pay Quarterly Estimated Taxes?</h2>
Handling your rideshare operation taxes involves calculating and paying estimated taxes throughout the year and reporting income on your income tax return.
<a href="https://1800accountant.com/blog/how-to-file-taxes-independent-contractor">As an independent contractor</a>&nbsp;driving for Uber, Lyft, or other ridesharing services, you must make estimated quarterly tax payments as your down payment on your annual income tax.&nbsp;
You can calculate your estimated tax rate with IRS Form 1040-ES and then use IRS Form 1040 to report your income on your final yearly return. You'll use 1040 Schedule C to report your profit and loss from rideshare driving activities. To fill out Schedule C, you’ll need to consult each 1099 form you receive from your rideshare company.&nbsp;
<h2>How Do Rideshare Drivers Pay Taxes?</h2>
You will use&nbsp;<a href="https://1800accountant.com/blog/5-tax-issues-that-cause-irs-trouble-for-1099-workers">IRS Form 1099-NEC and/or IRS Form 1099-K</a>&nbsp;as supporting documents for your tax return. Forms you may use to file your taxes and claim tax deductions include:&nbsp;
<ul>
 <li>
 <a href="https://1800accountant.com/blog/1040-vs-1099">IRS Form 1040</a>. File Form 1040, U.S. Individual Income Tax Return, to report taxable income and calculate your tax liability for the year.
 </li>
 <li>
 <a href="https://1800accountant.com/blog/sole-proprietorship">IRS Schedule C (Form 1040)</a>. Report your rideshare business income on IRS Form 1040, Schedule C, Profit or Loss from Business. Schedule C reports your&nbsp;<a href="https://1800accountant.com/blog/self-employed-tax-write-offs">self-employment income and business tax deductions</a>.&nbsp;
 </li>
 <li>
 IRS Schedule SE (Form 1040). Form 1040, Schedule SE, Self-Employment Tax, should be used to report your freelance income and calculate the self-employment tax liability. You’ll also need to pay income taxes, but you can deduct half of your self-employment tax.&nbsp;
 </li>
</ul>
<div type="entry" class="embedded-entry redactor-component block-entry" data-sys-entry-uid="blt79207efd7bb01d06" data-sys-entry-locale="en-us" data-sys-content-type-uid="rte_ad" sys-style-type="block"></div>
<a href="https://www.uber.com/us/en/drive/tax-information/" target="_blank">Uber</a>&nbsp;and&nbsp;<a href="https://help.lyft.com/hc/en-us/driver/articles/115012926967" target="_blank">Lyft</a>&nbsp;offer&nbsp;<a href="https://1800accountant.com/blog/small-business-taxes-guide-beginners-new-owners">tax guides with helpful insights for drivers</a>&nbsp;who handle their own tax preparation and filing responsibilities.&nbsp;
<h2>Consult a Tax Professional to Maximize Your Rideshare Deductions</h2>
Handling IRS compliance and preparing tax materials for your rideshare business is a complex, time-consuming responsibility. If you make a mistake or miss a deadline, you could be inviting penalties and additional scrutiny from the IRS. That's why many rideshare, gig-style workers trust 1-800Accountant, America’s leading virtual accounting firm, for their financial needs.
Whether you need <a href="https://1800accountant.com/services/small-business-taxes">business tax preparation</a>, <a href="https://1800accountant.com/services/business-tax-advisory">tax advisory</a>, or any of our professional accounting services, we have the affordable solutions you need to ensure your rideshare business remains compliant. Schedule a quick consultation–usually 30 minutes or less—to learn more.

All eligible rideshare drivers, including Uber and Lyft workers, must file their tax returns as independent, self-employed individuals […]

Uber-landscape.png

Uber Tax Deductions: 10 Tax Write-Offs for Rideshare Drivers

You’ll learn the pros and cons of the business structure, the process of registering an LLC, and how to decide whether an LLC is right for your Airbnb business[…]

Airbnb-landscape.png

Tax Benefits of Forming an Airbnb LLC: The Pros and Cons

Use this blog article as your comprehensive guide to Poshmark taxes, from people selling personal items to self-employed gig-style individuals running a business […]

Poshmark-landscape.png

How to File Poshmark Taxes: What, When, & How

Uber, a ride-hailing business, rose to prominence by offering an affordable and more convenient transportation alternative. Since its launch, Uber has become a household name and instrumental in creating the modern gig economy. As a result, workers have embraced the entrepreneurial spirit by becoming their own bosses. In the wake of Uber's ride-hailing success, they eventually created Uber Eats, a streamlined way for customers to order food for delivery. Like Uber, Uber Eats has been embraced by the public worldwide.Navigating taxes related to your Uber Eats work can be tricky, as the Internal Revenue Service (IRS) does not make allowances for workers who do not know what they'll owe. However, there are tax write-offs that&nbsp;<a href="https://1800accountant.com/blog/self-employment-tax-2">independent contractors and self-employed individuals</a>, a large part of Uber Eats workers, are eligible for, so there is certainty about tax-saving opportunities. Key Takeaways include:&nbsp;<ul><li>Determining whether your Uber Eats work qualifies for taxes</li><li>Discovering which tax forms to use if you owe</li><li>Learning when and how to file taxes</li><li>Browsing helpful deductions to lower your tax liability</li></ul><h2>Uber Eats Taxes: Do I Have to File Taxes for Uber Eats Income?</h2>You're considered a&nbsp;<a href="https://1800accountant.com/blog/how-to-file-taxes-independent-contractor">self-employed independent contractor</a>&nbsp;if you deliver for Uber Eats. This applies to gig workers delivering for GrubHub, DoorDash, and other modern delivery services.&nbsp;<a href="https://1800accountant.com/blog/1099-vs-w2">Unlike W-2 employees, whose employers handle tax withholdings for them</a>, gig workers are responsible for handling their own taxes.If you make $600 or more in a year working with Uber Eats, you will be responsible for filing taxes to report your income.&nbsp;<h2>Which Forms Do Self-Employed Uber Eats Drivers Need?</h2><a href="https://1800accountant.com/blog/freelancing-and-form-1099-nec-everything-you-need-to-know">Uber Eats will prepare IRS Form 1099-NEC</a>&nbsp;and IRS Form 1099-K if you're eligible.&nbsp;You will use IRS Form 1099-NEC if you make $600 or more in non-Uber Eats payments, including trip supplements, referrals, and promotions. You'd use IRS Form 1099-K if you made $5,000 or more in a year making deliveries for Uber Eats.&nbsp;<a href="https://help.uber.com/en/driving-and-delivering/article/how-do-taxes-work-as-a-delivery-partner-with-uber-eats-what-if-im-a-delivery-partner-with-uber-eats-and-a-ridesharing-driver-partner?nodeId=dd247b9d-329d-4df7-8193-0ed70e97c3be" target="_blank">Uber Eats will send an email</a>&nbsp;notifying you when your tax documents are ready on their website, &nbsp;<a href="http://drivers.uber.com" target="_blank">drivers.uber.com</a>, and in the Driver mobile application. Your tax forms should be available no later than January 31.Schedule a call with the experts at 1-800Accountant if you're having difficulty preparing and filing your taxes.&nbsp;<h2>When Do Uber Eats Drivers Owe Income Tax?</h2><a href="https://1800accountant.com/blog/proscons-entity-formation-independent-contractors">Unlike W-2 employees, independent contractors</a>&nbsp;such as those who work with Uber Eats must estimate and pay quarterly estimated taxes four times per year. Quarterly estimated tax payment due dates for the 2025 calendar year include the following:&nbsp;<ul><li>April 15, 2025</li><li>June 16, 2025</li><li>September 15, 2025</li><li>January 15, 2026</li></ul>Use IRS Form 1040-ES, Estimated Taxes for Individuals, to calculate and pay your quarterly estimated taxes. The form includes payment vouchers and instructions for filing online.If you struggle to make accurate calculations by each deadline, our&nbsp;<a href="https://1800accountant.com/services/quarterly-estimated-taxes">full-service quarterly estimated tax solution can help</a>.&nbsp;<h2>How to File Taxes for Uber Eats Earnings</h2>You will use&nbsp;<a href="https://1800accountant.com/blog/types-of-1099-tax-forms">IRS Form 1099-NEC and/or IRS Form 1099-K</a>&nbsp;as supporting documents for your tax return. Forms you may use to file your taxes and claim tax deductions include:&nbsp;<ul><li>IRS Form 1040. File Form 1040, U.S. Individual Income Tax Return, to report taxable income and calculate your tax liability for the year.</li><li>IRS Schedule C (Form 1040). Report your business income from Uber Eats on IRS Form 1040, Schedule C, Profit or Loss from Business. Schedule C reports your self-employment income and business tax deductions.&nbsp;</li><li>IRS Schedule SE (Form 1040). Form 1040, Schedule SE, Self-Employment Tax, should be used to report your freelance income and calculate the self-employment tax liability. You’ll also need to pay income taxes, but you can deduct half of your self-employment tax.&nbsp;</li></ul>Uber offers&nbsp;<a href="https://www.uber.com/us/en/drive/tax-information/" target="_blank">a guide to tax season</a>&nbsp;with helpful insights for Uber Eats deliverers who handle their own tax preparation and filing responsibilities.&nbsp;&nbsp;<div type="entry" class="embedded-entry redactor-component block-entry" data-sys-entry-uid="blt79207efd7bb01d06" data-sys-entry-locale="en-us" data-sys-content-type-uid="rte_ad" sys-style-type="block"></div><h2>What Tax Deductions Are Uber Eats Workers Eligible For?</h2><a href="https://1800accountant.com/blog/tax-deductions-food-delivery-drivers">Tax deductions related to your Uber Eats work</a>&nbsp;can lower your taxable income. Consider the following deductions and make sure to keep detailed records supporting each deduction you take.<ul><li>Business Expenses. You can deduct the cost of business assets, such as a car or bicycle you use with Uber Eats, over time via depreciation. You must follow IRS depreciation rules if the business assets you're writing off exceed $2,500.&nbsp;</li><li>Vehicle Deductions. Vehicle deductions can be made using the standard mileage deduction or the actual expense method.&nbsp;<ul><li>The 2025 standard mileage rate is 70 cents per business mile. It's important to follow restrictions on depreciation expense deductions and car payments.</li><li>If your vehicle operating expenses exceed the standard mileage deduction, you can opt for the actual expense method. Instead of deducting your business mileage, determine your expenses for business-related travel, including insurance, gas, and maintenance costs. The actual expense method typically allows for larger depreciation expense deductions.&nbsp;</li><li>While mileage deductions only apply to motor vehicles, you can deduct the costs of using a bicycle for deliveries. You can write off the business-use portion of your biking helmet, chain lock, and repair expenses.&nbsp;</li></ul></li><li>Tools and Equipment. It's common to use temperature-controlled packaging to keep items hot or cold and other tools and equipment that can be written off. Examples of tools and equipment that can be written off include hot bags and insulated packaging, coolers and ice packs, helmet, biking gloves, and other delivery-related clothing, and backpacks to transport deliveries to customers.</li><li>Fees. You can write off fees related to professional services you rely on to complete deliveries and manage your independent contractor business. Eligible fees include mileage tracking software, navigation app subscriptions, bookkeeping and expense management software, and virtual accounting costs.</li><li>Tolls and Parking. You can deduct tolls and parking fees you paid while delivering for Uber Eats. Keep your receipts from parking lots, garages, and tolls related to your deliveries.&nbsp;</li></ul><h2>Don’t Let Tax Season Eat Up Your Income: Get Expert Support</h2>Handling IRS compliance and&nbsp;<a href="https://1800accountant.com/blog/delivery-driver-tax-return">preparing tax materials</a>&nbsp;is a complex, time-consuming challenge. If you make a mistake or miss a deadline, you could be inviting penalties and&nbsp;<a href="https://1800accountant.com/blog/5-tax-issues-that-cause-irs-trouble-for-1099-workers">additional scrutiny from the IRS</a>. That's why many gig workers trust 1-800Accountant, America’s leading virtual accounting firm, for their financial needs.Whether you need <a href="https://1800accountant.com/services/small-business-taxes" target="_self">business tax preparation</a>, <a href="https://1800accountant.com/services/business-tax-advisory">tax advisory</a>, or any of our professional accounting services, we have the affordable solutions you need to ensure your self-employed business remains compliant. Schedule a quick consultation–usually 30 minutes or less—to learn more.

Unlike W-2 employees, whose employers handle tax withholdings for them, gig workers are responsible for handling their own taxes […]

Group 10997 (1).png

Do I Owe Taxes on Uber Eats Income: What to Pay & How to File

Like most states, Pennsylvania imposes several business taxes. Depending on your business activities and entity type, your company could be subject to multiple taxes […]

Penn-lanscape.png

Comprehensive Pennsylvania Small Business Tax Guide [2025]

Excepteur sint occaecat cupidatat

JOIN NOW!

Your small business resource for accounting, bookkeeping, and taxes from our experts.

Accounting, Bookkeeping, & Tax Blog

Screenshot_2023-08-14_at_1.36_1.png

CLP_JoinUs_Testimonial_WomanBlueBackground_3.png

Huong T
“Excellent first call, very informative. This is my third business … this time  I will ease the burden and use 1-800Accountant [for accounting]”

By clicking "Confirm My Appointment" you agree to our <a href="https://1800accountant.com/terms-of-services" target="_blank">Terms of Service</a>. This includes permission to communicate with you about your appointments via phone, email, or SMS. If you prefer to opt-out of SMS communications you may uncheck this box