With the rise of rideshare apps like Uber, DiDi, OLA and Shebah comes a rise in newly registered drivers. The ATO requires you to have an ABN and operate as a sole trader. Keeping track of your Uber expenses is the most important aspect of running a business as it dictates your profit margin. As they say, it costs money to make money. Here are ways to maximise your tax returns by keeping clean records and to keep the ATO off your back!
What records do I need to keep?
The ATO requires you to substantiate every expense for your Rideshare business with an invoice. If you can’t provide an invoice a record on a bank statement or credit card is sufficient as proof of the expense claimed. For more detail on record keeping see our blog on Tax deductions for Uber, Didi, Ola & Shebah drivers or the ATO website for Records you need to keep ATO.
Keep track of your Uber expenses
Bookkeeping manually means you keep bulky folders with easy to lose receipts and can be very time consuming. You might use an excel spreadsheet that takes time and can be messy and hard to keep track of all your receipts and Uber expenses. It will also cut into your day when you could be driving and earning more money on the road. With the Rideshare tax app we’ve made it easy, so you never lose a receipt again. And with a few taps of the app, you can store all your receipts in the app and download a free report with links to all your receipts entered into the app. You can produce this report in a matter of seconds, so if you ever get audited by the ATO you have every single receipt all in the one place.
Have a bank account only for your Rideshare Business
Not only should you open a bank account solely for your business so you can see exactly what you’re spending your money on, it’s also a backup just in case you lose a receipt if you are audited by the ATO to provide proof of the expense. It also makes it easier come tax time as you have all your income and Uber expenses on the one bank account.
Create a Logbook (if you don’t have one)
You need to keep a logbook for a period of 12 weeks to work out how much you use your car for business purposes. If you fail to do this, you will pay more tax at the end of the financial year as you will not be able to claim all your car expenses without a valid logbook. The Rideshare Tax app has an inbuilt digital logbook, and at the end of the 12 weeks you can email a copy of the logbook. For more information on keeping a logbook see Keeping a logbook for your rideshare business.