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Navigating Lyft's 1099 Taxes For The Self-Employed
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Navigating Lyft's 1099 Taxes For The Self-Employed
In the dynamic world of ridesharing, staying on top of tax obligations is important, especially for Lyft drivers. We’ll answer questions like what is Lyft taxes, what forms do you need to pay Lyft taxes and how to save on Lyft taxes.
Table of contents
Lyft tax changes for 2023...Read more
What are Lyft taxes?...Read more
How will I receive my 1099s from Lyft?...Read more
What tax forms do I need to file Lyft taxes?...Read more
How to save on Lyft taxes...Read more
What can drivers write off from Lyft taxes? ...Read more
When do you file your 1099 taxes for Lyft?...Read more
How can FlyFin help you file your 1099s?...Read more
Lyft tax changes for 2023
As per IRS rules, online marketplaces and payment processors only need to send Form 1099-K to a user if they have over 200 transactions and made over $20,000 in the 2023 tax year. The new threshold will be $5,000 from 2024. The IRS plans to gradually reduce this threshold to $600 in the coming years.
What are Lyft taxes?
Before diving into specifics, let's demystify Lyft taxes. As a rideshare platform, Lyft connects drivers with passengers, and any income earned through the platform is subject to taxation. These taxes are commonly referred to as Lyft taxes.
If you drive for Lyft and are a U.S. taxpayer, you’ll probably need to pay Lyft taxes, also known as SE tax. You pay 15.3% of any earned income over $400. 12.4% goes towards Social Security taxes, and 2.9% goes toward Medicare taxes.
How will I receive my 1099s from Lyft?
Lyft typically issues 1099-K forms to drivers. These forms detail the total income you've earned through Lyft transactions and are essential for accurate tax reporting. You can find all your tax documents on your Driver dashboard.
What tax forms do I need to file Lyft taxes?
When reporting Lyft income, you’ll need Form 1099-K which you will get from Lyft if you meet the threshold. Additionally, drivers may need to use forms like Schedule C and Schedule SE. You will still need to report your Lyft income even if you don’t get a 1099-K. Although in some cases, Lyft may send you a 1099-K if you made over $600.
How to save on Lyft taxes
- As a driver, you can use these strategies to minimize your Lyft tax liability:
- • Write off business expenses: Any business expenses related to your gig are deductible. This includes fuel, maintenance and car-related expenses.
- • Estimated quarterly taxes: Lyft drivers have to pay estimated quarterly taxes to avoid IRS penalties and interest. An estimated tax calculator can help.
- • Use tax credits: Lyft drivers can use credits like the EITC (Earned Income Tax Credit) or the Child and Dependent Care Credit to directly reduce their tax amount.
What can drivers write off from Lyft taxes?
- Leveraging tax deductions can significantly reduce your Lyft tax burden. Consider common write-offs like:
- • Vehicle expenses: Vehicle-related costs, including fuel, repairs, maintenance and depreciation.
- • Business supplies: Phone mounts, water bottles and seat covers.
- • Lyft fees and commissions: Fees paid to Lyft for using their platform.
- • Safety and cleaning supplies: Safety inspection costs, wipers, emergency tires.
When do you file your 1099 taxes for Lyft?
- As a Lyft driver, you should know these key dates:
- • January 31: Lyft will typically send 1099-Ks by this date.
- • April 15: This is the deadline for submitting Lyft 1099-K revenue on your federal income tax return.
- • Estimated quarterly taxes: File estimated taxes on April 15, June 15, September 15, and January 15 of the following year if your liability crosses $1,000. Use Form 1040-ES for this. Missing tax deadlines can lead to fines and heavy interest, so make sure to stay on top of them.
How can FlyFin help you file your 1099s?
FlyFin helps self-employed individuals find deductions, prepare and file accurate returns. Lyft drivers can get access to expert CPA who can offer unlimited tax support, including preparing and filing your returns.
Built-in tax calculators easily find your SE tax, estimated tax payments and even calculate outstanding tax penalties. If you link your expenses to the app, A.I. finds every business deduction to minimize your liability. FlyFin can help ease your tax season hassles, ensuring accurate and stress-free Lyft income reporting.
Starter Plan for free
✨ Only for Lyft drivers
Lifetime free plan
A.I. Deduction Tracking
Income tracking
Monthly Finance Tracker
Ultimate Tax Guide
What’s FlyFin?
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