How to record ridesharing income in quickbooks online.

urge99 · ‎October 02, 2020

I'd like to record rideshare (Uber/Lyft) income as Sales - Services.

In the case of Lyft, the weekly payout lands in my business checking account every Tuesday. In trying to assign a category to the deposit in the bank register, "Sales (Income)" is the closest option - despite the fact I setup a category in Sales - Services for Lyft.

Perhaps I'm thinking about this all wrong. Intuitively, I'm selling a service...a ride. So shouldn't that income be captured as such (Sales - Services)?

Here's the bottom line: I want to accomplish 2 things -

1) Recognize the Lyft rideshare income correctly in Quickbooks Online.

2) Have that income show up on the "Sales" dashboard widget.

Do I need to create phantom invoices or receipts? Seems crazy to think this would be the case.

I can't be the first person who has had this question...so hopefully I'm just terrible at searching the support database and someone has a few answers.

Rea_M · ‎October 03, 2020

Let me share details about handling Lyft rideshare income in QuickBooks Online (QBO), @urge99. With this, you'll be able to determine how to record one accordingly and file the right amount of your taxes to the agency.

Recording your Lyf rideshare income in QBO isn't the same as your sales transactions. It falls under the rules for a 1099-K for driving services and a 1099-MISC for any other payouts (i.e. new city bonuses, mentoring, referral fees, etc.).

The income that'll show up on the "Sales" dashboard widget is only your recorded sales transactions (i.e. invoice and sales receipts). This means your Lyft income won't be included in it

Furthermore, I'd also recommend consulting your accountant in recording and assigning a category to your Lyft income in QBO. This will ensure your books are accurate and taxes are calculated correctly.

I'm also adding this article to learn more about the tax forms for Lyft taxes: Understanding the Different IRS Tax Forms. It carefully describes the four types of forms like 1099-MISC, 1040 Schedule C, 1040-ES, and 1040 Schedule SE.

Please let me know if you have other concerns. I'm just around to help. Take care always.

View solution in original post

Rea_M · ‎October 03, 2020

Let me share details about handling Lyft rideshare income in QuickBooks Online (QBO), @urge99. With this, you'll be able to determine how to record one accordingly and file the right amount of your taxes to the agency.

Recording your Lyf rideshare income in QBO isn't the same as your sales transactions. It falls under the rules for a 1099-K for driving services and a 1099-MISC for any other payouts (i.e. new city bonuses, mentoring, referral fees, etc.).

The income that'll show up on the "Sales" dashboard widget is only your recorded sales transactions (i.e. invoice and sales receipts). This means your Lyft income won't be included in it

Furthermore, I'd also recommend consulting your accountant in recording and assigning a category to your Lyft income in QBO. This will ensure your books are accurate and taxes are calculated correctly.

I'm also adding this article to learn more about the tax forms for Lyft taxes: Understanding the Different IRS Tax Forms. It carefully describes the four types of forms like 1099-MISC, 1040 Schedule C, 1040-ES, and 1040 Schedule SE.

Please let me know if you have other concerns. I'm just around to help. Take care always.

urge99 · ‎October 04, 2020

Hi Rea - Thank you so much for the comprehensive reply/answer to my questions. Much appreciated. I'll review the various resources you pointed me to and consult further with an accountant should I have more questions.

Mjmurphy20 · ‎January 23, 2021

Hey I have the same question - what did you decide to do?

einaf639 · ‎August 03, 2021

I have the same question too and for the life of me, I don't understand why it's so hard to find an answer for this anywhere with all the thousands of Uber, Lyft, GrubHub, DoorDash, Instacart, Shipt, etc drivers out there. Is no one categorizing their income? Am I supposed to just leave it as "Uncategorized Income?"

RLJ336 · ‎February 29, 2024

If the uber service income is attached to the LLC business being documented in QuickBooks, then I would think creating a service invoice would be appropriate. The unique question would be how to account for the service fees already deducted by the third party app- as this would just be a line item in the invoice. This is the only way I can see bank reconciliation adjustments being implemented correctly. Is there another way to document the income and third party fee using service sales that would be more appropriate? For LLC umbrella it would all be submitted via 1099. This is known. But capturing appropriately in service income with appropriate bank reconciliation is the challenge. Thank you!

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How to record ridesharing income in quickbooks online.