Lyft Driver Taxes in Oklahoma - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Lyft Driver income taxable in Oklahoma?

Yes, income earned as a Lyft driver is absolutely taxable, both at the federal and Oklahoma state levels. The IRS considers you self-employed, meaning you're essentially running your own small business. Federally, you'll report your Lyft income and expenses on Schedule C (Profit or Loss From Business), which is then filed with your Form 1040. This schedule calculates your net profit (income minus expenses), which is then subject to income tax.

Oklahoma has a graduated income tax system. This means the tax rate you pay increases as your taxable income increases. For the 2024 tax year (filed in 2025), Oklahoma income tax brackets will apply to your net profit from your Lyft driving, after accounting for all eligible deductions. You'll use Oklahoma Form 511 to calculate your state income tax liability. It's crucial to accurately report your income to avoid penalties and interest.

Top Tax Write-offs for Lyft Drivers

As a Lyft driver, you're entitled to deduct business expenses to reduce your taxable income. Here are some key deductions:

• 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 claim. You cannot deduct mileage if you don't keep a log.
• Vehicle Expenses (Alternative to Mileage): Instead of the standard mileage rate, you can deduct the actual expenses of operating your vehicle (gas, oil, repairs, insurance, registration, depreciation). This requires meticulous record-keeping and is often more complex than using the standard mileage rate. Choose the method that yields the larger deduction, but be consistent.
• Phone & Data: If you use your phone for Lyft-related activities (navigation, accepting rides, communication), you can deduct the portion of your phone bill attributable to business use. Keep records showing how much time your phone is used for Lyft.
• Lyft-Specific Software/Apps: Any fees paid to Lyft or for apps directly related to driving (e.g., tax tracking software specifically for rideshare drivers) are deductible.

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). The good news is you can deduct one-half of your self-employment tax from your adjusted gross income on Form 1040, which helps reduce your overall income tax liability. However, this tax is in addition to your regular income tax, so it's important to plan for it.

Remember, self-employment tax applies to net earnings over $400.

Closing Tip for Oklahoma Residents

Tax laws can be complex, and it's easy to miss deductions or make errors. Consider using tax software designed for self-employed individuals or consulting with a qualified tax professional, especially in Oklahoma where the graduated income tax system requires careful calculation. Keeping excellent records throughout the year – mileage logs, expense receipts, and income statements – will make filing your taxes much smoother and ensure you're paying the correct amount. Don't wait until the last minute!