Lyft Driver Taxes in South Carolina - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Lyft Driver income taxable in South Carolina?

Yes, income earned as a Lyft driver is absolutely taxable, both at the federal and South Carolina state levels. The IRS considers you self-employed, meaning you're not an employee of Lyft, and are responsible for reporting all earnings and paying applicable 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 (more on those below). 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.

South Carolina Specifics: South Carolina has a graduated income tax system. This means the tax rate you pay increases as your taxable income increases. Your Lyft income, after deducting business expenses on your Schedule C, will be added to your other income (like wages from a traditional job) to determine your total taxable income for South Carolina. You'll then use the South Carolina tax brackets to calculate your state income tax liability. You'll file this information using South Carolina Form SC1040.

Top Tax Write-offs for Lyft Drivers

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

• Mileage: This is often the biggest deduction! For 2024, the standard mileage rate is 67 cents per mile for business use. Keep a detailed log of all miles driven for Lyft, including the date, starting and ending locations, and purpose (ride-related). You can use apps to track this automatically.
• 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 more detailed record-keeping, and you generally need to choose one method (mileage or actual expenses) and stick with it.
• Ride-Sharing Apps Fees & Software: Lyft charges fees for using their platform. These fees, as well as the cost of any tax preparation software or apps specifically used for ride-sharing income tracking, are deductible.
• Phone & Data: If you use your phone for Lyft-related activities (navigation, accepting rides, etc.), you can deduct the portion of your phone bill and data plan that is attributable to business use. Keep records of how much time you spend using your phone for Lyft.

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 can deduct one-half of your self-employment tax from your gross income on Form 1040, which helps reduce your overall tax liability.

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

Closing Tip for South Carolina Residents

Navigating taxes as a Lyft driver can be complex. I strongly recommend keeping meticulous records of all income and expenses throughout the year. Consider using accounting software designed for self-employed individuals. Don't hesitate to consult with a qualified tax professional (like myself!) in South Carolina to ensure you're taking advantage of all available deductions and complying with all applicable tax laws. Proper planning can save you significant money and stress during tax season.