For an avid driver, there are certain benefits for officially incorporating your ridesharing work as an official business. These include benefits and convenience aroudn tax filings and deductions, as well as protecting yourself from certain liabilities.
The below is an excerpt from a resourceful article. It is by Doug on RidesharingDriver.com.
Driving with an LLC or Corp? How to send your EIN to Uber or Lyft
Most Uber and Lyft drivers are sole proprietors who will report their ride share earnings on their Schedule C tax form, but some of you may have an LLC, corporation, or other tax entity that you prefer to operate under. It’s a smart move — by taking your Uber and Lyft earnings under the umbrella of a corporation, you can lower your tax bill.
Neither Uber nor Lyft makes it totally clear how to have your earnings filed under your Employer ID Number (EIN) or another tax ID. And after you do figure out how to navigate each Uber & Lyft’s tax reporting system, there’s often not a lot of reassurance that you’ve done it right and everything will be correctly reported at tax time.
I’ve operated as an Uber and Lyft driver under my S-Corp for a few years now, so I’ll walk you through how you can let Uber and Lyft know that you are operating under an EIN or another tax classification. And I can tell you what happens at tax time each year.
Which tax classifications does Uber accept?
Uber will allow you to operate under many different tax classifications. Most drivers will fall under individual/sole proprietorship, but Uber also allows drivers to operate under the following tax classifications.
- Individual/Sole Proprietor
- C Corporation
- S Corporation
- Limited Liability C Corporation
- Limited Liability S Corporation
- Limited Liability Partnership
- Disregarded entity
To read more about how to submit your busines information such as EIN and what to do come tax time, read the rest of the article at RidesharingDriver.com