Lyft Driver Taxes in Delaware - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Lyft Driver income taxable in Delaware?

Yes, income earned as a Lyft driver is absolutely taxable, both at the federal and Delaware state levels. As an independent contractor, you're considered self-employed by the IRS and the State of Delaware. This means you're responsible for reporting all earnings and paying the associated taxes.

Federal Taxes: You'll report your Lyft income on Schedule C (Profit or Loss from Business) as part of your Form 1040. Schedule C allows you to deduct business expenses (more on that below!), reducing your taxable income. The net profit (income minus expenses) from Schedule C is then reported on your Form 1040.

Delaware Taxes: Delaware has a graduated income tax system. This means the tax rate you pay increases as your income increases. Your Lyft income, after federal adjustments and deductions, will be subject to Delaware income tax based on the current year's tax brackets. You'll file a Delaware income tax return (Form 1040-D) to calculate and pay your state income tax liability. The Delaware Division of Revenue website (revenue.delaware.gov) will have the most up-to-date tax brackets and forms.

Top Tax Write-offs for Lyft Drivers

Maximizing your deductions is key to minimizing your tax bill. Here are some common deductions for Lyft drivers:

• Mileage: This is often the biggest deduction! For 2024, the standard mileage rate is 67 cents per business mile driven. Keep a detailed log of all miles driven for Lyft, including the date, starting and ending locations, and business purpose. You can use apps like Stride or Everlance to help with this.
• Vehicle Expenses (Alternative to Mileage): Instead of the standard mileage rate, you can deduct the actual expenses of operating your vehicle, such as gas, oil changes, repairs, insurance, registration fees, and depreciation. This requires meticulous record-keeping and is often more beneficial if your actual expenses are high. You cannot use both methods in the same year.
• Phone Expenses: If you use your phone for Lyft-related activities (navigation, accepting rides, etc.), you can deduct the portion of your phone bill attributable to business use.
• Lyft-Specific Software & Fees: Any fees paid to Lyft, or costs for apps/software used specifically for driving (e.g., tax tracking apps), are deductible.

The 15.3% Self-Employment Tax Surprise

As an employee, your employer pays half of your Social Security and Medicare taxes. As a self-employed individual, you're responsible for both halves. This is known as self-employment tax. You'll calculate this on Schedule SE (Self-Employment Tax). The combined rate is 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). You only pay self-employment tax on profits over $400. The good news is that you can deduct one-half of your self-employment tax from your gross income on Form 1040, which helps reduce your overall tax liability.

Closing Tip for Delaware Residents

Tax laws can be complex, and it's easy to miss deductions or make errors. Consider consulting with a qualified tax professional, especially if this is your first year driving for Lyft or if your tax situation is complicated. Keeping excellent records throughout the year – mileage logs, receipts for expenses, and income statements from Lyft – will make filing your taxes much smoother. The Delaware Division of Revenue website (revenue.delaware.gov) is a great resource for state-specific tax information. Wishing you a safe and profitable year of driving!