Lyft Driver Taxes in Missouri - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Lyft Driver income taxable in Missouri?

Yes, absolutely. Income earned as a Lyft driver is taxable at both the federal and Missouri state levels. As a driver, you are considered self-employed by the IRS and the Missouri Department of Revenue. This means you're responsible for reporting your earnings and paying all applicable taxes.

Federal Taxes: You'll report your Lyft income and expenses on Schedule C (Profit or Loss From Business), which is filed with your Form 1040. This form calculates your net profit (income minus expenses). The IRS considers you a business owner, even if you drive part-time.

Missouri State Taxes: Missouri has a graduated income tax system. This means the tax rate you pay increases as your taxable income increases. Your Lyft net profit (from Schedule C) will be added to your other income (like wages from a W-2 job) to determine your total taxable income for Missouri. You'll use Missouri Form MO-1040 to calculate your state income tax liability based on the current year's tax brackets. The Missouri Department of Revenue website (dor.mo.gov) will have the most up-to-date brackets and forms.

Top Tax Write-offs for Lyft Drivers

One of the biggest benefits of being self-employed is the ability to deduct business expenses, which can significantly reduce your taxable income. Here are some key deductions for Lyft drivers in Missouri:

• Mileage: This is often the largest 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 also deduct parking fees and tolls related to your Lyft driving.
• 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 method requires more detailed record-keeping. Generally, the standard mileage rate is more beneficial unless your actual expenses are very high.
• Lyft-Related Software & Apps: Expenses for apps or software used specifically for Lyft driving (e.g., Stride Tax, Everlance, GPS navigation apps) are deductible.
• Phone Expenses: If you use your personal phone for Lyft driving, you can deduct the percentage of the phone bill that relates to business use. Keep records of your business calls and data usage.

The 15.3% Self-Employment Tax Surprise

Because you're self-employed, you're responsible for paying both the employer and employee portions of Social Security and Medicare taxes. This combined tax is called Self-Employment Tax and is currently 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). You'll calculate this on Schedule SE (Self-Employment Tax), which is filed with your Form 1040.

The good news is you get to deduct one-half of your self-employment tax from your adjusted gross income (AGI) on Form 1040, which can lower your overall tax bill. However, be prepared for this additional tax liability – it’s often a surprise to new self-employed individuals. You only pay self-employment tax on profits over $400.

Closing Tip for Missouri Residents

Navigating self-employment taxes can be complex. I strongly recommend keeping meticulous records of all your income and expenses throughout the year. Consider using accounting software or a dedicated app designed for gig workers. Don't hesitate to consult with a qualified tax professional, like myself, to ensure you're taking all eligible deductions and complying with both federal and Missouri tax laws. Proactive tax planning can save you money and headaches come tax season! You can find more information on the Missouri Department of Revenue website at dor.mo.gov.