Taking off on the road as a professional rideshare driver—be it under Uber, Didi, Ola, Taxis, and more—isn’t as straightforward of a path as it seems. Part of the bumps ahead includes managing your tax obligations every year since, as a rideshare driver, you’re considered as an independent contractor who needs a proactive approach to your taxes.
While you have to take charge of reporting income and expenses in your tax return, along with the registration for Goods and Services Tax (GST), there is one silver lining that can make your experience behind the wheel better: there are plenty of Uber tax deductions to make your life on the road a more profitable one!
Exploring the Uber Tax Deductions Every Rideshare Driver can Claim
If you’re looking for the biggest tax deductions for your rideshare driving career, here are some of the deductibles the ATO will recognise as an acceptable claim for a percentage of your vehicle’s expenses:
- Application Processing Fees: the fees involved in becoming a rideshare driver involves paying for medical checks, police checks, and more, but the good news is that all the costs are considered tax-deductible by the ATO.
- Uber Fees: most rideshare drivers pay a small portion of the fare to their respective company like Uber since it’s critical to their commission, but these service fees are also claimable as tax deductions.
- Rider Amenities: all the amenities that make the driver and passengers experience better, like water, candy, or tissues, are tax-deductible.
- Tolls and Parking Expenses: all the fees a driver needs to pay on the road, such as the toll and parking fees, are also tax-deductible.
- Tax Agent, Bank Fees, and Accounting Expenses: since rideshare drivers manage their own accounting and banking when submitting income tax returns, the ATO accepts all the fees involved as tax-deductible.
- Fuel Costs: naturally, rideshare drivers will pay for the vehicle’s fuel consumption, which is thankfully claimable as tax-deductible.
- Cleaning and Maintenance Expenses: keeping the car clean, inside and out, comes with cleaning and other maintenance costs to keep the ride smooth for both the driver and passengers. Along with the expenses for replacing tyres, servicing the car, and other repair work, these are all considered tax-deductible.
- Depreciation and Lease Fees: if you own the vehicle you’re using for a job as a rideshare driver, the depreciation of the car’s value will also be tax-deductible, along with the lease fees included if you’re renting the car.
- Subscription Fees: every car needs a good Spotify playlist to keep the journey lively and welcoming, so you can also claim the expenses made for buying Spotify premium, Apple music, and more.
The Bottom Line: Exploring the Possible Tax Deductions Every Rideshare Driver can Claim
Making the most of tax deductions as a rideshare driver means you need to utilize an easy-to-use logbook for all your running vehicle expenses—be it your fuel, registration, insurance, service, repairs, maintenance fees, cleaning, depreciation of the vehicle value, rental costs, and more.
The “logbook” method is significantly simpler than calculating your cents per kilometre, so if you want to make your taxes easier as a rideshare driver, it’s better to leverage mobile applications that allow for a streamlined logbook for your tax returns.
Don’t Worry About Taxes on the Road: Rideshare Tax can Help You Navigate the Complexities of BAS on the Go
Taking on your career behind the wheel can come with its own set of challenges, and part of the factors that can make your ridesharing experience bumpy include managing your own taxes. Instead of letting your ABN and GST registration slow down your roll on the road, chat with our CPA Rideshare accountants to simplify your taxes on the go.
We offer a FREE app for rideshare drivers so you can easily manage your BAS and tax wherever the journey takes you. You only need to link your account and reap the benefits of its features—from recording your expenses for future tax claims, lodging your BAS, know your live GST position, capture receipts, and simplify your digital logbook all in a few clicks!