Lyft, Inc. Company Profile

You must file taxes for any year in which you earn over $400 from Lyft or Uber ridesharing. Drivers for Uber or Lyft typically report income earned from ridesharing as a sole proprietorship. This allows Lyft and Uber drivers to report their business income on their income tax returns.

If you earn less than $400 for the year and Uber or Lyft is your only income, typically you do not need to file taxes. If you earned less than $400 from Uber or Lyft but you have other earnings, such as from a W-2, then you might have to file, reporting your Uber or Lyft earnings. Since neither Uber or Lyft takes income tax out of your pay, it might help you financially if you make quarterly estimated payments.

Note:Self-employed individuals must pay the self-employment tax on top of traditional income tax. In some cases, you may owe $0 in personal income tax but still owe the self-employment tax.

Follow these steps to file your ridesharing tax return:

• Know how taxes work for self-employed individuals, as noted above. You will pay your self-employment tax in addition to regular income tax. You might have a greater tax bill than you’re used to before self-employment.
• Track deductions. Because you are your own boss, you qualify for tax deductions against your business expenses, which reduce the amount of tax you owe. Keep a list of your deductions along with the receipts for proof. Also, maintain a mileage log for all miles driven for Lyft separate from your personal driving miles.
• Make incremental tax payments throughout the year. Since Lyft does not take tax out of your pay, you should make payments towards your liability at least quarterly to avoid late payment penalties.

Prepare and file. As a self-employed individual, you must file a Schedule C, Schedule SE and a 1040. Your Lyft driver’s dashboard highlights your income made throughout any given year. File your taxes using your receipts for tax deductions and other tax documents. The IRS offers free tax information about multiple topics, such as self-employment income tax, on their website.

If you made at least $20,000 and received receipts for at least 200 rides for the year, Lyft will
send a 1099-K form to you.You can also download your 1099-K at Lyft.com. These rules are a little different in these states:

• In Virginia,Vermont and Massachusetts, you’ll receive a 1099-K once you’ve earned $600 or more in rideshare payments.
• In Illinois, you must earn at least $1,000 to receive a 1099-K.

Note: If you earn $600 or more from other activities, such as bonuses, you’ll receive a 1099-NEC.

Lyft drivers are independent contractors, so Lyft does not provide a W-2. Instead of a W-2, US drivers might qualify for one or more 1099s dependent on their income for that year, such as:

• IRS Form 1099-MISC
• IRS Form 1099-K
• IRS Form 1099-NEC

Which 1099 form you receive depends on how much you made and how much you drove for the tax year (see FAQ question: How Do I Get My Form 1099-K from Lyft?).

An EIN, or employer identification number, is a unique 9-digit number given to business entities by the Internal Revenue Service (IRS). An EIN is to businesses what a Social Security number is to individuals.

EINs have many names, such as taxpayer identification number, federal tax identification number, employer ID number, 95 number, EIN and tax ID number.

Individual Taxpayer Identification Numbers, or ITINs, are federal tax identification numbers given to non-citizens. Non-citizens aren’t eligible for Social Security numbers, so if they operate a business within the United States, they can use an ITIN for a sole proprietorship or a single-member LLC.