Uber & Taxi drivers are considered self-employed in Canada, they are identified as an independent contractor. The Uber & Taxi drivers must keep their records of the income they received from their riders, and all of their expenses so that we may prepare and file proper income tax returns. The Uber & Taxi drivers are independent contractors, and are not issued a T4 slip by their employers.
When preparing and filing their tax returns, Uber & Taxi drivers are required to complete a T2125. This form is known as a statement of business activities. It lists the income earned, and breaks down all of the expenses incurred in that year.
Required Documents:
To complete the tax return, we require the information regarding the income, the expenses, and mileage driven. We also need the following information:
- Your Annual Tax Summary from Uber (found at: partners.uber.com);
- Receipts, bills and statements for all tax deductible expenses;
- Your vehicle mileage from the beginning of the year, the end of the year, and separated between personal and business kilometres driven;
- Your Social Insurance Number; and
- Any other tax documents and slips related to any other employment you may have.
Deductible Expenses by a Driver:
The drivers are able to deduct certain business expenses from their income to lower the overall amount of tax they need to pay. Some of them are:
- Mileage
- Maintenance expenses (gas, oil, windshield washer fluid, new tires, tune-ups, etc.);
- Car washes;
- Vehicle insurance;
- Transponder for toll roads, tolls or parking costs;
- Cell phone expenses;
- Uber booking fees;
- Freebies for riders (water, candy, etc.);
- Cell phone mounts;
- Dash-cams;
- Phone accessories (chargers, auxiliary cords and hands free headsets);
- Car loan interest; and
- Accountant or bookkeeping fees.