Lyft Driver Taxes in Maine - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Lyft Driver income taxable in Maine?

Yes, income earned as a Lyft driver is absolutely taxable, both at the federal and Maine state levels. The IRS considers you self-employed, meaning you're essentially running your own small business. You'll report your Lyft income and expenses on Schedule C (Profit or Loss From Business) as part of your federal Form 1040. This schedule calculates your net profit (income minus expenses), which is then added to your other income to determine your adjusted gross income (AGI).

Maine has a graduated income tax system. This means the tax rate you pay increases as your taxable income increases. Your net profit from Lyft, as reported on Schedule C, will be added to your other income sources (like a W-2 job, if you have one) to determine your Maine taxable income. Maine’s tax brackets for 2024 (filing in 2025) will determine your final state income tax liability. You'll use Maine Form 1040-ME to calculate and report your Maine income tax.

Top Tax Write-offs for Lyft Drivers

As a self-employed Lyft driver, you can significantly reduce your tax bill by taking advantage of various deductions. Here are some key write-offs:

• Mileage: This is often the biggest deduction! For 2024, the standard mileage rate is 67 cents per business mile driven. Keep a detailed log (date, starting/ending location, business purpose) to substantiate your mileage. You can't use actual expenses (gas, oil, repairs) and the standard mileage rate – you must choose one.
• Vehicle Expenses (Alternative to Mileage): If you choose not to use the standard mileage rate, you can deduct the actual costs of operating your vehicle, such as gas, oil changes, repairs, insurance, registration fees, and depreciation. This requires meticulous record-keeping.
• Lyft-Related Software & Apps: Expenses for apps or software directly used for driving (e.g., Stride Tax, Everlance, GPS navigation apps) are deductible.
• Phone Expenses: You can deduct the portion of your cell phone bill that is directly related to your Lyft driving activities. If you use your phone for both personal and business purposes, you can only deduct the business percentage.

The 15.3% Self-Employment Tax Surprise

When you're an employee, your employer pays half of your Social Security and Medicare taxes. As a self-employed individual, you're responsible for both the employer and employee portions – a combined 15.3% self-employment tax. This is calculated on Schedule SE (Self-Employment Tax). However, 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, which helps reduce your overall tax liability.

Closing Tip for Maine Residents

Tax time can be complex, especially when you're self-employed. I strongly recommend keeping excellent records throughout the year – mileage logs, receipts for expenses, and income statements from Lyft. Consider using accounting software designed for gig workers to simplify tracking. Don't hesitate to consult with a qualified tax professional in Maine to ensure you're taking all the deductions you're entitled to and complying with all state and federal tax laws. A little preparation now can save you significant time and money later!