Lyft Driver Income and Expenses

[origun]

Client was a part-time Lyft driver for 3 months. He received a 1099-MISC with about $3000 in Box 7. He also has a 2019 summary sheet from Lyft where Gross Earnings are broken down as about $15k "Ride Payments" and $3K (same am't as on 1099) as "Non-ride earnings". Various fees are listed (platform fees, service fees, etc) totaling about $9k. So what do I start with on Sch.C Income, the $15k or the $3k from 1099? Client doesn't have a clue as to how much he received but is sure he lost a lot of money! It seems to me that I should start out with the $15k, have the $9k as expenses along with other expenses he incurred. However some information I have found online seem to say I should start with am't on 1099. If so, there will be a huge loss. ..which he thinks he should have!

And a related question: the client had to rent a car from Hertz as his vehicle was an old junker. So for vehicle expenses, do I use "actual" and deduct rental costs, gas, car washes and some repairs he had to pay?

Thanks for any help; this is the first such driver I have had.

[TaxGuyBill]

Use $18,000. You said he had $15,000 of "Ride Payments" AND $3,000 of "Non-ride earnings". That is $18,000.

After $9,000 of fees and vehicle expenses, it seems likely your client has very little profit, if any. $15,000 of Ride Payments in 3 months is A LOT of miles.


You can use either Actual Expenses or the Standard Mileage Rate. If he didn't keep track of expense, mileage may be easier. But if he did keep track of actual expenses, try it out both ways and use the best result.

[origun]

His statement from Lyft says he has about 8000 "online miles". So are you saying he could use that at 58¢/mile even though he didn't drive his own car? He's trying to come up with actual expenses but I don't feel comfortable with his record keeping.

[Burke]

You can use the mileage rate on a leased vehicle, so 58 cents X 8K miles seems to be documented by Lyft, but he does not deduct the lease payment if he does that. If he leased a vehicle, that expense should be easily attainable. He either had to pay on a credit card, or by check/debit card. If he uses actual expenses, and deducts the lease payment, etc., adjusting for personal use, no depreciation is taken. But he needs records of gas, etc. Mileage would be the easiest and probably is to his advantage tax-wise.

[origun]

Thanks for all the help. After further research, I see that he didn't "lease" but instead participated in Lyft's "Express Drive" program with Hertz. Intuit says " You can only claim a mileage deduction for a vehicle you own or Lease. The Lyft Express Drive program is a short-term rental agreement, so the miles you drove don't qualify for the mileage deduction." So...assuming that is correct, I'm stuck with "actual" which will be tough as decent records are non-existent.

[TaxGuyBill]

I don't think that is accurate. As far as I know, "lease" and "rent" mean the same thing. I am not aware of any restrictions for the Standard Mileage Rate for short term leases/rentals versus long-term leases/rentals.

As a side note, the huge amount of misinformation that Intuit provides is absolutely appalling.