Ridesharing services such as Uber and Lyft have become increasingly popular both as a means for transportation and as a way to earn extra money. In June Garrett Camp, co-founder of Uber, estimated that there were 2 million Uber drivers providing rides to 65 million riders across the globe. The United States is one of the biggest markets for ridesharing, gaining a foothold several years ago in larger cities and eventually finding its way to small-medium metropolitan areas. In San Francisco alone there are 45,000 registered Uber and Lyft drivers, 12-percent of whom are active on a regular basis. These drivers account for 20-percent of the city’s traffic (about 570,000 average miles driven per day), leaving the area’s 1,800 licensed taxi drivers in the dust.
Ryan Macauley, CPA
Imagine this – a husband and wife own a sales company and they purchase two passenger automobiles to be used in the course of business. The automobiles are available for personal use, but the husband and wife claim that they are primarily used to transport and entertain clients that are in town. While this fact pattern points to a valid business deduction for the automobiles, the IRS disagreed. This was part of a larger case that went to US Tax Court (Brent Mcminn and Lynette Mcminn v. Commissioner), which disallowed the deduction on the grounds that the automobiles were listed property and business use could not be substantiated.
As the deadline for filing 2016 tax returns approaches, some taxpayers are still struggling with the rules for the 3.8% tax on “net investment income” (NII). The tax law provision authorizing this special tax was included in the Affordable Care Act (ACA), the law known as Obamacare. Although the ACA may be repealed by the new Trump administration, it would not likely be retroactive to 2016.