Lyft Driver Taxes in Utah - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Lyft Driver income taxable in Utah?

Yes, income earned as a Lyft driver is absolutely taxable, both at the federal and Utah state levels. The IRS considers you self-employed, not an employee of Lyft. This means you're responsible for reporting your earnings and paying all applicable 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). Even if you don't feel like you made a profit, you must file Schedule C if your gross income from Lyft exceeds $400.

Utah Specific Rules: Utah has a flat income tax rate of 4.85% for 2024. This means all of your taxable income (after deductions) will be taxed at this single rate. You'll report your federal adjusted gross income (AGI) on your Utah state income tax return (Form TC-1040) and calculate your Utah taxable income and tax liability. Like the federal level, you'll need to report your Schedule C profit on your Utah return.

Top Tax Write-offs for Lyft Drivers

As a self-employed Lyft driver, you can significantly reduce your tax liability 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't use actual expenses (gas, oil, etc.) 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 expenses of operating your vehicle, such as gas, oil changes, repairs, insurance, registration fees, and depreciation. This requires meticulous record-keeping.
• Lyft-Related Software & Apps: Expenses for apps or software used specifically for driving (e.g., Stride Tax, Everlance, GPS navigation apps) are deductible.
• Phone Expenses: You can deduct the portion of your cell phone bill that is directly related to your Lyft driving activities. If you use your phone for both personal and business purposes, you can only deduct the business percentage.

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 and 2.9% for Medicare) on earnings over $400.

You'll calculate this on Schedule SE (Self-Employment Tax), which is also filed with your Form 1040. The good news is that you can deduct one-half of your self-employment tax from your adjusted gross income, which can lower your overall tax bill.

Closing Tip for Utah 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 your first year as a Lyft driver. Keeping accurate 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. Good luck, and drive safely!