Lyft Driver Taxes in Pennsylvania - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Lyft Driver income taxable in Pennsylvania?

Yes, absolutely. Income earned as a Lyft driver is taxable at both the federal and Pennsylvania state levels. The IRS considers you self-employed, meaning you're essentially running your own business. This impacts how you report your income and pay taxes.

Federal Requirements: You'll report your Lyft income on Schedule C (Profit or Loss From Business) as part of your Form 1040. This form is where you detail your earnings and, crucially, your deductible business 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.

Pennsylvania Specific Rules: Pennsylvania has a flat income tax rate of 3.07% for the 2024 tax year (filing in 2025). Your net profit (income minus expenses) from your Schedule C will be added to your other income and taxed at this rate. Pennsylvania also requires you to file a state income tax return (Form PA-1040) to report this income.

Top Tax Write-offs for Lyft Drivers

As a Lyft driver, you're entitled to deduct legitimate business expenses, which can significantly reduce your tax liability. 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. 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, maintenance, insurance, registration fees, and depreciation. This requires meticulous record-keeping.
• Ride-Sharing Apps Fees: Lyft charges fees for using their platform. These fees are deductible as a business expense.
• 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 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 totals 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 get to deduct one-half of your self-employment tax from your adjusted gross income.

You only pay self-employment tax on profits over $400. So, if your net earnings (after expenses) are less than $400, you won't owe self-employment tax.

Closing Tip for Pennsylvania Residents

Tax laws can be complex, and it's easy to miss deductions. Consider using tax software designed for self-employed individuals or consulting with a qualified tax professional (like myself!) to ensure you're maximizing your deductions and complying with all federal and Pennsylvania tax regulations. Keeping excellent records throughout the year – mileage logs, receipts, and income statements – will make tax time much smoother. Good luck, and drive safely!