Why does my rideshare business still owe tax after I claimed mileage?
Because mileage is a deduction, not a tax eraser.
A rideshare driver can have valid deductions and still show meaningful net profit. Another common issue is that drivers confuse:
- gross receipts
- platform fees
- net cash deposited
Fresh example:
- gross fares:
72,000 - platform fees:
14,000 - mileage deduction equivalent:
19,500 - other deductible supplies and tolls:
2,400
That still leaves taxable business income. The exam trap is assuming a large deduction means the return should show no tax due.
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