Filing taxes as a Lyft driver or other on-demand service provider is more complicated than filing as a traditional employee. Whereas employers withhold taxes on paychecks for employees, Lyft drivers and similar professionals must instead calculate and pay their own taxes at the end of the year, since they are considered to be self-employed.
Self-employed professionals typically receive 1099s that summarize their earnings throughout the year, which they use to calculate and file their taxes. But when you’re left without a 1099, things can get a bit more complicated.
To help you with the process, here’s a guide to filing taxes when Lyft forgets to send out a 1099.
What Type of Tax Forms Should I Have Received?
IRS Form 1099-K summarizes the income you earned through payment card and third-party transactions. Every ride you offer through Lyft is paid for via card transaction, and if you made more than $600 through those payments, you should have received a 1099-K that summarizes these earnings. On the other hand, Form 1099-MISC summarizes your non-employee compensation. While a 1099-K summarizes earnings made through rides, the 1099-MISC summarizes earnings made through other Lyft services, such as driver referrals.
Do I Have to Report My Lyft Income If I Have No 1099?
Even if you don’t receive a 1099, you still need to self-report the income. You are required to pay taxes on any 1099 income you have. There is a misconception going around the Lyft community that no 1099 means no taxes; this is very incorrect and will lead to a lot of headaches for Lyft drivers.
The IRS can audit you for up to three years (or six years if you have understated your income by 25% or more), regardless of the dollar value. So it’s important that you report all of your income, even if you don’t have a 1099.
How Do I Report My Income Without a Lyft 1099?
The numbers provided on 1099s can be easily found on your Lyft Yearly Stats dashboard. Here’s a handy diagram that outlines where you can find these vital numbers:
Keep in mind that “gross ride earnings”:
- Does include Lyft’s commissions
- Does not include the Trust and Safety fee, so this amount is not included in the numbers in your driver dashboard and should not be recorded as an earning or expense on your Schedule C
How and Where Do I Record the Amounts From My Lyft Driving?
You’ll record your earnings and expenses on the Schedule C, which is where you calculate your business profit.
You’ll then use this business profit on:
- Schedule SE, which is for calculating self-employment taxes
- Form 1040, which is your personal tax form, where you consolidate your income from all types of work you do
What Mileage Can I Write Off for My Lyft Driving?
Lyft’s mileage breakdown will give you all mileage you drove while you had driver mode on (meaning you were willing to work and accept rides). This will be the total mileage you’re able to write off for the year, since you aren’t generally allowed to write off commuting costs. This isn’t the only deduction you can claim. For a list of deductions common to the self-employed, click here.
Any More Tax Tips?
Taxes for Lyft drivers or other self-employed individuals can be tricky, but being organized and prepared for tax time can make the process a bit less complicated. Using tax software like QuickBooks Self-Employed can help get your books in order throughout the year. Software can help you separate personal and business expenses, automate your deductions, calculate estimated taxes and more. Then, when April comes around, you’ll be completely prepared to file your year-end taxes and avoid any IRS penalties.