If you’ve just begun your journey as an Uber driver, then it’s understandable to be generally clueless about the inner workings of this business. And while people are often concerned with the driving aspect of the job, we find that the most common issue people have comes in the form of taxes. Indeed, doing taxes as an Uber driver can be confusing for some due to their lack of experience. To help remedy this, we thought it would be useful to put together a brief discussion regarding Uber drivers’ taxes. If this is something that you want to learn more about, read on for a brief guide on Uber drivers’ taxes.

How to File a Tax Return for Uber Drivers

All you’ll need to do is to complete the tax return for individuals, as well as the supplementary section and the business and professional items schedule. This shouldn’t be too complicated as all you’ll need to do is to report your income and costs from Uber driving as you would with any other source of income you may have. After that’s done, you’ll have to pay tax on your total net income at your personal tax rate. 

How to Handle Goods and Services Taxes

Aside from income tax, Uber drivers also need to meet their Goods and Services Tax (GST) obligations. All Uber drivers are required to register for an Australian Business Number and a GST. Take note that you’ll need to do this regardless of your turnover, as it’s a common misconception that drivers with a turnover lower than $75,000 don’t have to do this. 

Basically, this means that you’ll need to register your GST and charge customers GST once you begin working as an Uber driver. This also allows you to claim credits on the GST for any business-related purchases that you’ve made.

At the end of every quarter, it’s important to remember to report your GST activities on a business activities statement and lodge it with the Australian Taxation Office. The GST you owe the Australian Taxation Office is the amount of GST you received from fares subtracted by the GST you paid for business purchases.

What Are the Top Tax Deductions

Just like any other business, Uber drivers can deduct their expenses for taxes. You can deduct costs you paid to provide ride services against your income, which will help lower your tax bill. Here are the most common costs you can claim:

  • Car maintenance
  • Cleaning 
  • Repairs
  • Registration
  • Insurance
  • Application fee to become an Uber driver
  • Licensing or service fees paid to Uber

If you’re the type of driver that provides passengers with free internet, Spotify, and other add-ons then you’ll be glad to know that these costs can also be tax-deductible. To claim these tax deductions, be sure to keep proper records and to separate your personal expenses from your business expenses.

Conclusion

Hopefully, this article proves to be useful when it comes to helping you figure out how to approach taxation as an Uber driver. Be sure to keep all of this information in mind to ensure that the entire process goes smoothly. If you ever feel lost regarding this topic, don’t hesitate to look back on this guide.

Despite all the information that we’ve listed above, doing your taxes can still be overwhelming. The best you can do is download the best tax software for rideshare drivers instead of managing on your own. Rideshare Tax is a free app designed for this purpose. We provide free GST and ABN registration and help you manage your rideshare business easily in just a few taps. Download the app now.