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 TxSt Alumni Want Help me with some tax advice 
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Post TxSt Alumni Want Help me with some tax advice
This seems like the best place in the forum to post this even though not much traffic here on this portion of the board, but still got to find the most appropriate forum for this so....

I feel like I've gotten a pretty good understanding of filing my own taxes as I have been doing it for 10 years now. First time ever after my first job I went to H&R Block only to watch them input numbers into a software program, be done in 10 minutes and get my $1k refund after paying them like $75. So easy I vowed I cold just do it myself. I've spent many hours reading various IRS publications and instructions for each corresponding form but have come to a bit of a dilemma in my Schedule C (Self Employed Profits & Losses) and my taxes are now such that it would cost be $150+ to get them looked at by someone.

ok. Topic: rideshare. There has to be lots of other bobcats out there who have picked this up as a side gig for extra income so hopefully someone will help me out...

Driving for Uber, now Fare and GetMe, since they bailed in May, I am trying to deduct everything I possibly can in order to bring down my self employment taxes. I've got all my miles tracked and that good to go, all my carwashes, supplies like iPhone mount, chargers, and waters. Where I am stuck is on cellphone expenses. Now clearly the cell phone is an integral part of the business as you download and use the app to hook up with passengers who request via their app. These apps use data ( a good chunk of it mind you). Plus I'd say on average I have to contact passengers almost 90% of the time whether it be text or phone call.

So, how do I deduct a portion of my cellphone bill for business use vs personal use?

What I had been doing was: since I was already tracking all my miles via an excel spreadsheet and getting a running total of a % of business use vs personal use for the vehicle deductions portion I used that percentage and multiplied it by by total cell phone bill payments for the year. ie) I paid $1,822 to AT&T for my cell service. I put 23,000 miles on my car last year with 8,000 of them being for my business (rideshare). Thus, I used my vehicle for this business 35% of the time. Again the question is, can I then multiply this 35% by $1,822 to claim $638 in utility expenses on the schedule c?


I'm getting mixed answers on this on other various forums, and I don't know why but I trust many of you guys on this forum. Maybe it's the :cat: connection. I dunno, but gonna go it a go here too...thanks.

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Sun Jan 15, 2017 12:02 pm
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Post Re: TxSt Alumni Want Help me with some tax advice
I just noticed this question, sorry if my reply is too late.

Cell phones are considered “listed property”. Therefore, you are required to maintain adequate records to prove the business percentage. I am not exactly sure how you would do that with a cell phone since it doesn’t have an odometer like your car. The challenge you would face with the method you have proposed is does the business percentage of your car bear any realistic relationship to the business percentage of your phone? Since the answer to that question is probably "no", I would try to find a separate way to justify the business percentage of the phone such as number of hours worked divided by number of hours awake.

I found the following paragraph from a court case, Alexander Dominic Senulis, Jr. v. Commissioner, TC Summary Opinion 2009-97, that describes the way the IRS looks at this issue. Good luck with this one.

B. Cellular Telephone Expense
Section 274(d) applies to the use of “listed property” as defined in section 280F(d)(4), which includes cellular telephones. To deduct these types of expenses, the taxpayer must provide evidence that through adequate records corroborates the taxpayer's testimony as to: (1) The amount of the expenditure or use; and (2) the business relationship of the taxpayer to each expenditure or use. Sec. 274(d). To satisfy the adequate records requirement of section 274, a taxpayer must maintain records and documentary evidence that in combination are sufficient to establish each element of an expenditure or use. Sec. 1.274-5T(c)(2), Temporary Income Tax Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985). Although a contemporaneous log is not required, corroborative evidence to support a taxpayer's reconstruction “of the elements of the expenditure or use must have a high degree of probative value to elevate such statement” to the level of credibility of a contemporaneous record. Sec. 1.274-5T(c)(1), Temporary Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985).
Petitioner produced billing statements from January through September 2002 showing the amounts that he paid for the cellular telephone service to substantiate this expense. We find that cellular telephone service would be an ordinary and necessary business expense in petitioner's line of work because petitioner was essentially on call 24 hours per day, 7 days per week. However, petitioner conceded that he also used the cellular telephone to call Ms. M. when he was in Texas. Petitioner has failed to meet the strict substantiation requirements of section 274(d) in that he did not substantiate the business use of the cellular telephone. Therefore, petitioner is not entitled to a deduction for cellular telephone expense.


Last edited by SWT84 on Fri Mar 03, 2017 9:59 am, edited 1 time in total.

Fri Mar 03, 2017 9:57 am
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Post Re: TxSt Alumni Want Help me with some tax advice
I've talked to several drivers about this, and they seem to fall into two categories: I don't claim the cost due to record keeping/proof, or I have a separate phone for Uber type driving. I know this doesn't help the past, but it's what I found out.

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Sat Mar 04, 2017 3:45 pm
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Post Re: TxSt Alumni Want Help me with some tax advice
Thanks for the reply! Not to late, as this an other issues with self employment this year have pushed me back on when I normally file. I have everything pretty much filled out except for some details on the Schedule C. Yeh this would be much simpler if I had a phone dedicated solely to business.

I do like that method and I did track the number of hours online so that seems like a more viable method. However business miles I kind of see as a viable method, because the moment I start tacking my miles is the moment that I turn my app on (Uber/Fare/GetMe/Ride|Austin) which means it is immediately using data which I pay for. The moment I go offline by turning off the apps and thus am no longer consuming data is the moment I jot down my ending odometer reading. This was my justification for using that method. However, I see what you are saying in who is to say I am not using a vast majority of my data while on youtube or browsing the web, which in that case the mileage is a flawed system since it really does not track accurately phone usage privately as a way to compare it to business use.

Now I am in another bind. One of the companies, Fare, sent me a 1099-MISC and not a 1099-k as Uber does. As an Uber driver I am able to deduct their cut of the fare (called an Uber fee which is 20% of the total fare), and other fees they charge the rider such as: rider fee, airport fees, and split fare fees. This company, Fare, did not send me any of that information when I requested it and now am told they don't need to provide that with me as I cannot deduct those expenses like I do with Uber since they sent me a 1099-MISc and not a 1099-K. Is that accurate?

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Tue Mar 28, 2017 3:47 pm
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Post Re: TxSt Alumni Want Help me with some tax advice
I am not familiar with that industry but I don't know why you wouldn't be able to deduct any ordinary and necessary business expenses. Does the 1099-Misc include the amounts that Fare kept or did they just report the net amount that you received?


Tue Apr 11, 2017 11:10 am
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Post Re: TxSt Alumni Want Help me with some tax advice
We still use our CPA from our San Marcos days. Contact the guys at Sean Crowder's office.

512-392-0576

Might be too late for this year, but there's always next year.


Mon Apr 17, 2017 9:44 am
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Post Re: TxSt Alumni Want Help me with some tax advice
Thanks foe the help. Think I mostly figured it out but really appreciate advice from here. I really like to do it myself as I think I have a pretty decent basic understanding of things and not have to pay someone an arm and a leg (quotes I got due to the complexity of my taxes were in the $200+ range). The biggest thing I keep learning from all of this is that there are different opinions from tax experts based on different interpretations of some parts of the tax code. Seems like some stuff in the tax code is cut and dry and some stuff is kind of based on can you make a good case to justify your position (like having a really good lawyer vs a crappy one).

In the end I walked away with a $27 refund!!! Yes!! :sombrero:
The goal for me is to aim for the break even mark so $27 is pretty much there, but on the + side of it.

Thanks!

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