Driving for Uber not only offers flexibility and independence but also comes with its own set of expenses. The good news is that many of these costs are tax-deductible, helping you reduce your taxable income and potentially receive a larger tax refund.
Uber driver tax deductions include vehicle expenses like fuel, maintenance to Uber service fees and even car cleaning supplies, but there are conditions.
At My Tax Refund Today, we specialise in helping rideshare drivers like you navigate the tax system with ease. As such, we’ve prepared this handy guide to uber driver tax deductions to help you understand what you can claim.
Uber Driver Tax Deductions Checklist
Here’s a handy checklist of the tax deductions for Uber drivers:
- Vehicle Expenses: Fuel, depreciation, repairs, registration, insurance, and loan interest.
- Uber Fees and Commissions: Service fees, booking fees, and unreimbursed tolls.
- Car Cleaning Expenses: Professional car washes and cleaning supplies.
- Mobile Phone and Internet: Work-related portion of phone and internet bills.
- Accessories and Equipment: Phone mounts, chargers, dash cams, and GPS devices.
- Training and Education: Courses directly related to your Uber business.
- Accounting Fees: Costs for tax agents and accounting software.
- Bank Fees: Account keeping and transaction fees for business accounts.
- Vehicle Lease Payments: If leasing your car for Uber work.
- Personal Protective Equipment: Hand sanitiser, masks, and cleaning wipes.
- Other Expenses: Tolls, entertainment subscriptions, and passenger amenities.
Vehicle Expenses
Your vehicle is the cornerstone of your Uber business. You can claim deductions for:
- Fuel costs: Every trip consumes fuel, and these costs add up over time.
- Depreciation: The decline in value of your vehicle due to wear and tear.
- Repairs and maintenance: Regular servicing, tyre replacements, and unexpected repairs.
- Registration and insurance: Including compulsory third-party and comprehensive insurance.
- Interest on car loans: If you’re paying off a loan for your vehicle, the interest is deductible.
You can choose between:
- Logbook method: Claim the work-related percentage of all your vehicle expenses based on a logbook maintained for at least 12 consecutive weeks.
- Cents per kilometre method: Not typically suitable for rideshare drivers due to high work-related mileage.
Note: The logbook method is generally more beneficial for Uber drivers because of the extensive use of the vehicle for business purposes.
Uber Fees and Commissions
The fees charged by Uber directly reduce your income. You can claim:
- Service fees: The percentage Uber takes from each fare.
- Booking fees: Any additional fees charged per ride.
- Tolls and parking fees: When not reimbursed by passengers.
Car Cleaning Expenses
Maintaining a clean vehicle is vital for customer satisfaction and your ratings. You can claim:
- Car washes and detailing: Costs for professional cleaning services.
- Cleaning supplies: If you clean the car yourself, expenses for cleaning products and equipment.
Mobile Phone and Internet Expenses
Your phone is an essential tool for accepting rides and navigating. You can claim the work-related portion of:
- Mobile phone bills: Calls, texts, and data usage necessary for the Uber app.
- Internet expenses: If you use home internet to manage your Uber account or related activities.
How to calculate:
- Itemised bills: Identify work-related usage.
- Reasonable estimate: Keep a usage diary over a representative period.
Accessories and Equipment
Items that enhance your ability to provide services can be claimed, such as:
- Phone mounts and chargers: Essential for navigation and communication.
- Dash cams: For security and evidence in case of incidents.
- GPS devices: If you prefer a dedicated GPS unit.
- Car seat covers and floor mats: To protect your vehicle’s interior.
Immediate deduction: For items costing $300 or less.
Depreciation: For items over $300.
Work-Related Training and Education
If you undertake courses to improve your driving skills or business management, you can claim:
- Course fees: For defensive driving courses, first aid training, or small business workshops.
- Travel expenses: To and from the place of education.
Note: The course must be directly related to your current income-earning activities.
Accounting and Tax Agent Fees
Costs incurred in managing your tax affairs are deductible, including:
- Tax agent fees: Fees paid to a registered tax agent.
- Accounting software: Costs for software used to track income and expenses.
Bank Fees and Charges
If you have a separate bank account for your Uber income and expenses, you can claim:
- Account keeping fees
- Transaction fees
Vehicle Lease Payments
If you lease your vehicle, the lease payments are deductible to the extent the vehicle is used for work.
Personal Protective Equipment (PPE)
Due to health concerns, you may provide PPE for yourself and passengers:
- Hand sanitiser
- Masks
- Cleaning wipes
Other Expenses
- Road tolls and e-tag fees: When not reimbursed by passengers.
- Subscriptions: For music or entertainment services provided to passengers (e.g., Spotify).
- Sundries: Bottled water, mints, or other amenities offered to passengers.
What Uber Drivers Generally Can’t Claim
To avoid any issues with the ATO, be aware of expenses that aren’t deductible:
- Fines and penalties: Such as speeding tickets or parking fines.
- Clothing: Ordinary clothes worn while driving are not deductible.
- Personal expenses: Any portion of expenses related to personal use.
Important: You can only claim the business-use portion of expenses. Personal use must be excluded.
Tips to Maximise Your Tax Return
We want to help you get the most out of your tax return. Here are some handy tips:
- Maintain a Logbook: Keep a detailed logbook for at least 12 consecutive weeks to determine your business-use percentage.
- Keep Detailed Records: Store all receipts, invoices, and statements throughout the year.
- Use Technology: Apps and software can help track expenses and mileage.
- Separate Expenses: Consider a dedicated bank account for your Uber income and expenses.
- Stay Informed: Tax laws can change, so keep up-to-date or consult a professional.
Estimate Your Tax Refund
We’re Here to Help!
At My Tax Refund Today, we’re dedicated to making tax time simple and stress-free for Uber drivers like you. Our experienced team understands the specifics of uber driver tax deductions and can guide you through the process.
- Personalised advice: We’ll assess your individual situation to maximise your refund.
- Quick and convenient: Our online services mean you can get your tax refund processed without leaving home.
- Ongoing support: Have questions? We’re here to help year-round, not just at tax time.
Working out the tax deductions for an Uber driver doesn’t have to be complicated. With the right information and support, you can ensure you’re not missing out on any entitlements. So why not let us help you get the refund you deserve? After all, you work hard keeping Australia moving—let us drive you towards a better tax outcome.
Contact My Tax Refund Today and let our friendly team assist you in making the most of your Uber tax deductions. We’re just a call or click away!
Please note: Tax laws and regulations can change. While this guide provides general information, it’s important to consult the latest ATO guidelines or a tax professional for advice tailored to your individual circumstances.
