Early each year, Lyft drivers start getting their 1099 forms for their previous year earnings in the mail and that can only mean one thing...it's tax time!
If you drive for Lyft you'll be getting your 1099 form soon, but which one will you get?
Some Lyft drivers will be getting the 1099-MISC if they generated under $20,000 in earnings for the previous year. And those drivers that generated over $20,000 in income (and at least 200 trips) will be getting the 1099-K.
However, let's dive in a little deeper to understand how Lyft drivers are classified for tax purposes and what those different 1099 forms really mean. As always, this post is not to be considered tax advice. For specific advice regarding your tax return, you should speak directly with a tax professional.
Those who drive for Lyft are classified as independent contractors. They are not considered employees of Lyft, they are considered self-employed. You are essentially your own business whether you drive for Lyft, Uber or any other ridesharing service.
We won't go into the whole debate over self-employed vs. employee, the different benefits or the laws that are or aren't in place to protect your employment. Instead, we'll focus on the tax classification, which is an independent contractor. According to the IRS independent contractors are deemed as self-employed and their earnings are subject to self-employment tax.
For more information on ridesharing taxes, feel free to browse the page the IRS setup for people to understand the taxation of earnings from the sharing economy. To be self-employed, which you've probably noticed by now, means Lyft isn't taking out a percentage of your paycheck for taxes. Instead, paying the appropriate taxes on time becomes your job!
NOTE: If you earned less than $600 from any company they are not required to send you a 1099! However, you are required to pay taxes on any earnings regardless of size. This means that if Uber didn't send you a 1099, yet you still earned money, you absolutely must claim those earnings on your taxes!According to the IRS independent contractors are deemed as self-employed with their earnings subject to self-employment tax.
There is no specific 1099 form called the "Lyft 1099 Form", it's actually a standard form 1099, either 1099-MISC or 1099-K, and the one you get is going to be based on both your earnings from the previous year and the number of "transactions", aka "Rides" that took place in that time frame and which you were paid a fee.
We'll cover that in more detail below, but first, let's find out when we can expect Lyft to send out these 1099 forms.
Lyft, not unlike every other US company that has independent contractors to pay, is required to submit all 1099 forms for non-employed compensation and W-2 forms for employees.The deadline for sending these forms to both employees (W2) and independent contractors (1099) is January, 31st.Often companies like Lyft won't have to file the forms with the IRS until a later date, such as the end of February, but by law they are required to get these forms out no later than January 31st so employees and independent contracts have ample time to receive them and file their tax return.
Have you received a 1099-MISC form? If so, the MISC which stands for miscellaneous, means you've made at least $600 in prior year earnings from one source. In this case, if you've received a 1099-MISC from Lyft you've made at least $600 -and no more than $19,999 in earnings for the previous year.
If Lyft has sent you the 1099-K form you've earned over $20,000 and have more than 200 transactions (rides)with them in the previous year. Every ride you made and earned money on last year is treated as a taxable event. If you have more than 200 rides, plus $20k+ in earnings, you get the K form.
As a Lyft driver you...
We hope this guide helps you understand your Lyft 1099 forms, and happy filing!
The 2022 Schedule C is the tax form used for reporting your business' net profit to the IRS. Use this section-by-section guide to fill out your Schedule C and maximize your tax deductions
Expose current liabilities and learn how to increase compliance with your reimbursement policies. Regular enforcement is key to risk management.