Lyft Driver Taxes in Wyoming - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Lyft Driver income taxable in Wyoming?

Yes, your income as a Lyft driver is taxable, but the situation is simpler in Wyoming than in most states. While Wyoming does not have a state income tax, you are still responsible for federal income tax and self-employment tax on your Lyft earnings.

The IRS considers you self-employed when you drive for Lyft. This means you'll report your income and expenses on Schedule C (Profit or Loss From Business) when you file your federal income tax return (Form 1040). You’ll calculate your net profit (income minus expenses) on Schedule C, and that net profit is then added to your other income when calculating your adjusted gross income (AGI) on Form 1040.

Because Wyoming has no state income tax, you won’t need to file a state income tax return related to your Lyft driving income. However, you are still subject to federal taxes.

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 purpose (e.g., "Lyft ride - passenger pickup to destination"). You can also deduct parking fees and tolls.
• 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. You must choose one method (mileage or actual expenses) and be consistent.
• Phone Expenses: If you use your personal phone for Lyft-related activities (navigation, accepting rides, etc.), you can deduct the percentage of the phone bill attributable to business use.
• Ride-Sharing Apps Fees & Subscriptions: Fees paid to Lyft, as well as the cost of any subscription services used to help manage your driving (e.g., tax tracking software like Stride Tax or Everlance) are deductible.

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, totaling 15.3% (12.4% for Social Security and 2.9% for Medicare).

You'll calculate this tax on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on 92.35% of your net earnings from Schedule C. The good news is that you can deduct one-half of your self-employment tax from your gross income on Form 1040, which helps reduce your overall income tax liability.

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

Closing Tip for Wyoming Residents

Driving for Lyft can be a great way to earn income, but proper tax planning is crucial. While Wyoming’s lack of state income tax simplifies things, don’t overlook your federal obligations. Keep meticulous records of your mileage and expenses throughout the year. Consider using accounting software or consulting with a tax professional to ensure you’re maximizing your deductions and complying with all IRS regulations. Good luck, and safe driving!