Lyft Driver Taxes in Wisconsin - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Lyft Driver income taxable in Wisconsin?

Yes, income earned as a Lyft driver is absolutely taxable, both at the federal and Wisconsin state levels. As an independent contractor, you are considered self-employed by both the IRS and the Wisconsin Department of Revenue.

Federal Taxes: You'll report your Lyft income on Schedule C (Profit or Loss from Business) as part of your Form 1040. This form allows you to deduct business expenses (more on that below) to arrive at your taxable profit. The official 2024 standard mileage rate is 67 cents per mile for business use of your vehicle. Keep a detailed mileage log!

Wisconsin Taxes: Wisconsin has a graduated income tax system, meaning the tax rate you pay increases as your income increases. Your Lyft income, after deducting business expenses on your federal Schedule C, will be transferred to your Wisconsin Form 1040-ES (or incorporated into your regular 1040 filing). Wisconsin also has its own set of deductions and credits, so be sure to explore those as well. Your federal taxable income is the starting point for calculating your Wisconsin income tax.

Top Tax Write-offs for Lyft Drivers

Maximizing your deductions is key to minimizing your tax liability. Here are some common write-offs for Wisconsin Lyft drivers:

• Mileage: As mentioned, the 2024 standard mileage rate is 67 cents per mile. You can deduct the business portion of your mileage. Keep a detailed log including dates, destinations, and business purpose.
• Vehicle Expenses (Alternative to Mileage): Instead of the standard mileage rate, you can deduct the actual expenses of operating your vehicle (gas, oil changes, repairs, insurance, registration fees, depreciation). This requires more detailed record-keeping, and generally only makes sense if your actual expenses exceed what you'd get using the standard mileage rate.
• Lyft-Related Software & Apps: Fees paid for ride-hailing apps, GPS navigation, or tax preparation software specifically used for your Lyft business are deductible.
• Phone Expenses: If you use your personal phone for Lyft driving, you can deduct the percentage of the phone bill attributable to business use. Keep records of your usage.

The 15.3% Self-Employment Tax Surprise

Many drivers are surprised to learn about self-employment tax. When you're an employee, your employer pays half of your Social Security and Medicare taxes. As a self-employed individual, you're responsible for both the employer and employee portions – a total of 15.3%.

You'll calculate this tax on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on your profit (income minus expenses) and only on earnings over $400. The good news is that you can deduct one-half of your self-employment tax from your adjusted gross income on Form 1040, which can lower your overall tax bill.

Closing Tip for Wisconsin Residents

Navigating taxes as a Lyft driver can be complex. I strongly recommend keeping meticulous records of all your income and expenses throughout the year. Consider using accounting software designed for independent contractors. Don't hesitate to consult with a qualified tax professional in Wisconsin – like myself – 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!