It's tax time, and you are trying to find your income from Uber. But maybe something isn't right. Your Uber Eats 1099 doesn't look right. Or perhaps you still need to get one and need to know where to find it. Maybe they sent you two.
Of all the delivery companies, Uber Eats is the most confusing. The amount they report on their 1099 form(s) differs from what you received over the past year. Or they send two different 1099 forms, and you're wondering which is correct.
How do you figure out what to put down on your taxes when Uber's 1099s are just wonky? Do you really have to pay taxes on the entire amount when Uber Eats says you made more than you did? How do you stay out of tax trouble or avoid over-paying?
I've been delivering for Uber Eats since early 2018. Fortunately, my previous experience as an eBay seller and with other forms of self-employment prepared me for the different tax documents they use.
Because it's a part of Uber, Uber Eats uses the same 1099 and tax document forms they do. As a result, this information is for delivery and rideshare contractors.
I'll look at the three different tax documents that Uber provides to their rideshare and delivery contractors. We'll examine how they work together and how you can use that information to make sense of the Uber Eats 1099 mess. We'll look at:
- How Uber reports income to the IRS
- Understanding the Uber Eats 1099-K
- Understanding the Uber Eats 1099-NEC
- Uber Eats and the Annual Tax Summary
- Why does Uber say you made more than you did?
- How to use the Uber Eats tax summary and forms.
- Frequently asked questions about Uber Eats 1099 forms
But first, some Important things to understand about this article
This is the second article in our series about Uber Eats driver taxes. Also in this series is our Uber Eats Taxes Calculator, which helps you understand how your Uber Eats earnings impact your total tax picture. We'll link to other related posts where applicable, and you can see a complete list of articles here.
This series focuses on how taxes work for Uber Eats contractors in the United States. Most of the principles apply to most food delivery services and rideshare companies. However, we do focus on many of the things that Uber does differently than other gig economy companies.
This is not tax advice and should not be taken as such. The purpose here is to provide information that helps you understand how things work with Uber Eats and, in this article, their tax reporting.
For personal tax advice related to your situation, you should seek a tax expert who can explain things specifically for you.
How Uber Eats reports your income to the IRS
Businesses that pay any independent contractor $600 or more must report those payments to the IRS and the contractor. This is done using 1099 forms. They must submit those forms by January 31 (or the first business day after if January 31 is on a weekend or holiday).
Uber Eats does this differently than most gig economy delivery companies. That's because they use two different 1099 forms.
Uber reports delivery fares (base pay), surge payments, and customer tips on IRS form 1099-K. They use form 1099-NEC to report incentives and referral payments.
Uber only sends a 1099-NEC if your incentive and referral payments exceed $600.00. The 1099-K only goes out if your tips, base pay, and surges are more than $600. That means you may receive one or the other forms, and possibly both, at the end of the year.
Finally, Uber provides an Annual Tax Summary. The tax summary is not submitted to the IRS. Instead, it's offered to help contractors understand the bigger picture of their total earnings and fees.
Understanding the 1099-K on Uber Eats
Form 1099-K reports your base pay, surge payments, and customer tips. This makes up most of Uber Eats revenue for most drivers.
In previous tax years, Uber only had to send a 1099-K if the total payments exceeded $20,000. This meant that Uber and Uber Eats drivers could make thousands of dollars without receiving a 1099 form. However, the American Rescue Plan of late 2020 included language that lowered that threshold to $600.
Why is Uber Eats using 1099-K instead of 1099-NEC?
The 1099-K form is used by payment processors such as credit card companies to report payments received by vendors. Using a 1099-K, Uber claims that customers are paying drivers directly and that Uber is simply processing the payment.
There's a reason they do this related to the misclassification of employees. Many government entities, most recently including the Department of Labor, feel that gig economy companies should have employees instead of independent contractors. There are several guidelines to determine when using an independent contractor is permissible.
By positioning themselves as the middleman and payment processor, Uber Eats suggests that we don't really contract with Uber. Instead, our work relationship is direct with the customers and vendors. Uber claims they are not a delivery or transportation company but a tech company that connects drivers with customers.
The reality of our relationship with Uber is something different. The pay formula for Uber Eats is based on factors that differ from what the customer pays, meaning that reporting with a 1099-K is all smoke and mirrors. However, that's a topic for another time.
Understanding the 1099-NEC on Uber Eats
Uber reports base pay, surges, and tips on 1099-K because, according to their narrative, those payments come from the customer.
However, several payments you receive come directly from Uber. Uber Eats Incentives such as trip supplements, boosts, and quests are paid directly by Uber. They also pay bonuses to drivers who refer other drivers in certain markets.
Uber Eats reports those payments on form 1099-NEC because that reflects payments they make directly to you as a contractor.
Uber's Annual Tax Summary
In my opinion, the annual summary is the most important of the three documents you can download from the Tax Information tab in your Uber account dashboard.
Uber provides an annual tax summary of all of your earnings. If you do not receive either 1099 form or only get one of them, you can pull up the annual tax summary to see what you earned.
You will notice that the tax summary says you made more than you really did. We'll discuss why that is and what to do with it shortly.
In the example above, $13,275.80 is what Uber reports they paid the driver. The $11,140.76 was what the driver actually received.
Gross Trip Earnings (under Gross Payment) is the amount Uber reports on form 1099-K. Prior to the 2022 tax year, this driver would not have received a 1099-K because that total was under $20,000. For 2022 and later, their 1099-K would report $10,484.56 to both the IRS and the driver.
“Total Additional Earnings” is the basis for the 1099-NEC. This person made more than $600 and thus would get a 1099-NEC form.
This form is critically important when you do your tax return for these reasons:
- It tells you what Uber Eats is reporting for your income.
- It gives you numbers you can use even if you don't get a 1099 form.
- The tax summary gives you information that will keep you from paying more than you have to due to Uber inflating your earnings.
Why does Uber Eats say I made more than I did?
commission or fee out of your payment. This is what Uber is claiming.
Remember, the whole purpose for Uber's use of the 1099-K is to claim you were paid by the customer directly. Creating a commission or processing fee (that companies like Square and Paypal charge) supports that claim.
Is this legitimate?
When I first started delivering for Uber Eats, the “Uber service fees” were 35% of the total pay. If I received $6.50, Uber said I made $10, and they deducted a $3.50 service fee. However, I've noticed more recently that the fee percentages are all over the place. Some of the service fees are negative amounts.
If you pull up a trip record in your history, you can find out what those “fees” are for each trip. At the bottom of the pay breakdown, you can tap on “More Details.” The details reveal what the customer paid and the portion supposedly paid to Uber.
The “Paid to Uber” section in the above screenshot is what Uber calls their service fees. That's what they add from all your trips to determine your total “expenses, fees, and taxes.”
If this were legitimately a service or processing fee, a pattern or formula would support it. However, the fees are inconsistent. Uber is clearly subtracting your payment from the customer's delivery fees to determine the part that's supposedly paid to Uber. It appears to me that this is only a paper transaction to support their narrative of us being paid directly by the customer.
In other words, Uber is lying to the government about what we made. If you're not careful, that can result in paying more taxes than you should. The good news is, there's something you can do about it, which we'll discuss next.
How to use the Uber Eats tax forms at tax time
There are two things you need to do at tax time:
- Determine how much you made with Uber Eats
- Deduct your Uber expenses, fees, and tax.
Determining what you were paid.
The service fees thing makes Uber pay less straightforward than other gig companies like Doordash and Instacart. The 1099's you receive could claim you received more than you did, or you could get a single 1099 that reports less than you actually made.
You might be tempted to add all of your bank deposits and report that income instead. This is not a good idea. Remember that Uber reports your earnings to the IRS. If you claim less income than what was reported to the IRS, they could be coming after you for an explanation.
If you receive both the 1099-K and 1099-NEC from Uber, add those numbers to determine total earnings. Otherwise, use the “Gross Trip Earnings” from the Uber tax summary if you didn't get either of the 1099 forms. This ensures that your reported earnings are consistent with what Uber reports.
Deducting the Uber Expenses, Fees and Tax.
As an independent contractor, you provide services as a business, not as an employee. You pay taxes as a business. That means your taxable income is the difference between your revenue and expenses.
Uber Eats puts you at a disadvantage because they report more income than you actually receive. However, there's a solution to that.
They claim that you paid a commission or a processing fee. The “expenses, fees, and tax” is a deductible expense item.
On Schedule C, you would include that Uber service fee amount as an expense. Many drivers list that under line 10: Commissions and fees. Others will list it as an “Other expenses” line item.
Here's how it works: Say that you earned $10,000 delivering for Uber Eats. However, Uber Eats reports that they paid you $12,000, then charged $2,000 in taxes and fees. In that case, you list the full $12,000 as income, but then claim the $2,000 as an expense, making your taxable income $10,000.
You must claim the service fee to ensure you don't pay more in taxes than you should.
Frequently asked questions about Uber Eats 1099 forms
There is no Uber W2, as you are an independent contractor, not an employee. Uber Eats is self-employment, meaning you would not receive a W2.
It's tempting to think that if Uber didn't send a 1099, the IRS does not know about your income. However, there are some essential things to keep in mind: First, because you're filing as a business, the IRS requires you to report revenue regardless of if it's reported. Second, the IRS knows that many Uber contractors underreport income. Finally, the existence of an annual tax summary means there is documentation of your total earnings, which the IRS can obtain if they want.
Uber may send your 1099 forms by mail or via email. They're required to submit that form by the first business day on or after January 31. You can log into your driver portal at Uber.com and select Tax Information to get your 1099's and tax summary. You can also access the information in the Uber driver app by selecting Account and then Tax Information.
Uber does not send a 1099 form if you made less than $600. Remember that Uber uses two different 1099 forms. Base pay, surges and customer tips are on 1099-K, with incentives and referrals on 1099-NEC. The total amount paid for either type must be at least $600 for Uber to submit the appropriate form.
If you received one 1099 form from Uber, it likely only reports some of your income. Uber uses two 1099 forms, reporting different types of income on each one. Refer to the Gross Trip Earnings in your annual tax summary for the correct income amount.
The best way to compare Uber's numbers with what you actually received is to refer to the Annual Tax Summary. According to Uber, the amount you made is different from what they paid you. They claim a higher payment and that service fees or commissions were deducted from pay before it was deposited in your bank account. As a result, you should compare your total payments to the Net Earnings on your tax summary.
Uber's annual tax summary does have a line item that displays online miles. However, that is not factored into the expenses, fees and tax total on the online tax summary.
No. The online miles on the tax summary is not submitted to the IRS. It is your responsibility to track your business mileage and report them yourself on the Schedule C you use for your Uber Eats tax reporting.
While you could use the “online miles” number in the annual summary to calculate your standard mileage allowance, it is not IRS-compliant. The IRS requires a daily log, meaning a single number may not stand up in an audit. You are responsible for tracking your own miles for your Uber Eats deliveries. Also, remember that Uber's mileage total often only captures some of your business driving. Using that number could short-change you when calculating your Uber Eats vehicle deduction.+