Lyft 1099 Forms: Starting in the first week of February Lyft drivers will start getting their 1099 forms for their previous year earnings in the mail and that can only mean one thing…
It’s tax time!
As mentioned above, if you drive for Lyft you’ll be getting your 1099 from them 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 + at least 200 trips will be getting the 1099-K.
Not too complicated. 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.
How Are Lyft Drivers Classified? Employee or Independent Contractor?
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 92.35% of their earnings subject to self-employment tax.
The self-employment tax tiers for 2017 are:
- 15.3% on the first $127,200 in net self-employment income.
- 2.9% on any net self-employment income above $127,200.
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!
See also: Paying your quarterly estimated taxes
Now that we have a firm grasp of the tax classification of Lyft drivers, let’s dive into the 1099 forms!
The Lyft 1099 Form
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.
When does Lyft send 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.
Here’s an example: In 2017 you completed 657 rides for a total of $25,920.38. Each of the 657 rides had taxable earnings, and you earned more than $20,000 so for 2018 Lyft is going to send you a 1099-K.
As a Lyft driver you…
- Are an independent contractor that is classified as self-employed.
- Will receive either a 1099-MISC or a 1099-K.
- Will owe self-employment taxes on all earnings for the previous year.
As an independent contractor, you want to make sure that you’re not only paying your taxes correctly, but taking the proper deductions.
Unfortunately, Lyft can’t handle this for you. They can’t send you an itemized list of your mileage, gas costs, parking fees, toll fees, car insurance, .etc – That’s on you.
Thankfully, we created an app that does just that!
Everlance automatically tracks all of your mileage. All you need to do when you’re done with a ride is simply swipe left or right to classify it as either business or personal. In addition, Everlance can also track all of your expenses and revenue!
You can take pictures of receipts or input expenses & revenue manually. Everlance will save image receipts forever, so there’s no worry there.
At the end of the year, just export your data and import it into your favorite tax software or hand over to your tax pro and you’re done!
If you upgrade to Everlance pro ($5/mo) you can add your bank account and Everlance will automatically add in your expenses and revenue – making the whole data collection process even easier.
The average Everlance user finds over $6,500 per year in deductions and saves hundreds of hours on tax preparation. Whether you use the free version or the $5/mo pro version, the time savings alone is worth using it.
Everlance automatically tracks over 1,000,000 miles every single day, and there are thousands of Lyft drivers just like you that use and love our product. You should give it a try. Test it out. Tell us what you think!
You can download Everlance (iOS & Android) for free and get started immediately.