Rideshare & Food Delivery Driver Tax: What You Need to Know - Accounts NextGen
Rideshare drivers earn discoverable revenue, as per the Australian Taxation Office. Assume you're a rideshare driver for Uber, Didi, Ola, or a similar company. In this scenario, the assessable revenue is the overall amount of money you make by providing services.
When you rideshare, you of using your vehicle to carry paying customers to their chosen venue. It has risen in popularity as a viable choice for many people who want to be their director. As a result, rideshare drivers are handled similarly to other self-employed people. As a self-employed individual, you should also be informed about properly filing your online tax returns.
As a result, you'll be able to profit from tax deductions related to your company expenses.
Uber and Other Rideshare Drivers Need to Talk About ABNs and GST
You should be aware of the Goods and Services Tax in addition to the income tax return in Melbourne. It has to do with the 10% tax on all products and services you offer in Australia. Here is the quick rundown:
Rideshare Drivers: You must register for GST if you are a rideshare driver. Even worse, you do not fulfill the $75,000 criteria.
Food Delivery Drivers: Food delivery drivers, such as those employed by Uber Eats, should not have to be GST-registered. If your Australian Business Number receives more than $75,000, therefore, you must do so.
When you serve as a rideshare driver and a food delivery driver, you must obey the guidelines that apply to rideshare drivers. It shows you'll have to file a GST tax return in 2020.
Since you're a rideshare driver, you're running a small company, so you'll need an Australian Business Number. This 11-digit number is used to identify your company and is required when you register for GST.
Is it appropriate for you to pay income tax?
Since you make money from your ridesharing service, the rules require you to report your income and file your online tax return correctly. Although it operates in the same way as some other companies, computing your taxable income is simple.
So here are a few simple ideas to help you through your income tax filing:
- Consider your net earnings first before subtracting all other reductions, such as GST points.
- You could get a report of your earnings by contacting the rideshare company.
- Make a list of all the costs you paid.
- Then, from your net earnings, subtract the sum on your spending list, which is now your taxable income.
You will be in the tax-free bracket if your annual income is less than $18,200. It means you are not expected to pay any income tax. However, being in this bracket does not exempt you from filing an online tax return.
If you receive more than the above number, you must pay income tax. Many rideshare drivers in the United States operate similarly to sole traders. As a result, their income taxes are frequently the same as that of private taxpayers.
How Much Are You Willing to Pay in Taxes?
Your rideshare earnings will determine the value you pay. These earnings come from travelers who pay you for your facilities, and you must report them as earnings. In the meantime, you can report as an expenditure all of the money you spend on your ridesharing service.
All of the following elements will be added together to calculate your income:
- Gross fares
- Split fare fees
- City fees
- Airport fees
- Booking fees
- Toll fees
- Tips from passengers
In the meantime, you'll most likely incur the following costs:
- Uber service fees
- Toll fees
- City fees
- Booking fees
- Split fare fees
To measure your taxable benefit, deduct your total expenditures from your profits. Our calculation can assist you in calculating how often income tax you would pay.
It would be best if you Took Tax Deductions.
When it comes to taxes, you shouldn't pay more than you need to. As a consequence, tax deductions must be measured as a step of the procedure. These deductions reduce your taxable benefit, resulting in a lower tax bill. The following are among the most common tax deductions:
Tax Advice for Rideshare Drivers
- Keep a logbook of your car use at all times. The ATO accepts logbooks as proof of how you can use the vehicles for the company. Follow these guidelines:
- The logbook should have 12 weeks of driving reports in it. You can log in anytime you like throughout the year.
- And for the entire session or transfer, only one logbook is needed. Person distribution records are unnecessary.
- Non-business and private trips should never be reported in the logbook.
- From the beginning to the end of the shift, record the date and odometer readings.
Receipts should also be retained. Any receipt, including your bank statement and digital invoices, will be accepted by the ATO. It's a different situation if you're seeking GST credits since the Business Operation Statements has more stringent criteria.
The Accounts NextGen framework is the quickest and most secure way to file your rideshare online tax return 2020. Give us a call or sign up for an account with us right now.
