Lyft Driver Taxes in Oregon - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Lyft Driver income taxable in Oregon?

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

Federal Requirements: 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). Lyft will send you a Form 1099-K detailing your earnings if you meet certain thresholds (generally $20,000 in payments and more than 200 rides). However, you are legally obligated to report all income, even if you don't receive a 1099-K.

Oregon Specific Rules: Oregon has a graduated income tax system. This means the tax rate you pay increases as your taxable income increases. Your net profit from Schedule C will be added to your other income (like wages from a traditional job) to determine your total taxable income for Oregon. You'll then use the Oregon tax brackets to calculate your state income tax liability. Oregon also has a standard deduction and potential itemized deductions, similar to the federal system. You'll file Oregon Form OR-40 to report your state income tax.

Top Tax Write-offs for Lyft Drivers

As a Lyft driver, you can significantly reduce your tax burden by claiming eligible business expenses. Here are some key deductions:

• 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 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 complex than using the standard mileage rate. You generally need to choose one method (mileage or actual expenses) and stick with it.
• 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 of how much time you spend using your phone for Lyft.
• Ride-Sharing Apps & Software: Fees paid to Lyft, as well as the cost of any tax preparation software or apps specifically used for tracking your driving income and expenses, 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 reduces your overall tax liability. This tax applies to your net earnings from Schedule C that exceed $400.

Closing Tip for Oregon 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 accurate and organized records throughout the year will save you time and money when filing your taxes. The Oregon Department of Revenue website (https://www.oregon.gov/dor) is a valuable resource for state-specific tax information. Good luck, and drive safely!