How much should a Lyft driver set aside?
What this calculator sets aside from a week of earnings, for a single filer in Illinois who drives the miles shown and has no other costs. The share falls as miles go up, because each mile comes off profit before tax.
| Earned in a week | Business miles | Set aside a week | Share |
|---|---|---|---|
| $400 | 150 | $33 | 8.3% |
| $700 | 280 | $90 | 12.8% |
| $1,000 | 400 | $147 | 14.7% |
| $1,400 | 560 | $225 | 16.1% |
Your own share depends on your filing status, state and other costs: enter a typical week in the 1099 tax calculator, or log each payout in the tracker.
How Lyft income is taxed
Lyft drivers are independent contractors, so no tax is withheld. Ride earnings and bonuses are both income; Lyft's fees and your business miles, usually the largest costs, come off before the 15.3% self-employment tax and income tax are worked out.
Where to find your Lyft tax documents
Lyft puts tax documents in the Tax Center of the Driver Dashboard by January 31. Every driver gets an Annual Summary with rides, online miles and gross earnings; it is not a tax form, but it helps you fill one in. A 1099-K shows what passengers paid for your rides, before Lyft's fees, so the fees are a business expense you subtract. A 1099-NEC covers bonuses, referrals and other non-driving pay.
For 2026 pay, a 1099-NEC comes at $2,000 or more (it was $600 through 2025) and a 1099-K once payments pass $20,000 in more than 200 transactions; below that there may be no form, but the income is still taxable.
Lyft tax deductions
| Deduction | 2026 figure | Notes |
|---|---|---|
| Business mileage (standard rate) | $0.725 a mile in this estimate (2026) | Miles to a pickup and with a rider; keep a log of every business mile |
| Lyft service fees | What Lyft kept | When your 1099-K shows what passengers paid |
| Phone bill | Business share of the bill | The share of use that is for the app |
| Car washes, cleaning, water for riders | What you paid | For the car you drive with |
| Phone mount, dash cam | What you paid | Used for driving |
| Half of self-employment tax | Worked out for you | Comes off before income tax |
The online miles in the Annual Summary are a good check on your own log, but keep the log: the IRS asks for date, miles and purpose (Publication 463). Tips from riders may qualify for the tips deduction (2025 to 2028), which the annual calculator can add.
An example
Example. A single Lyft driver in Illinois earns $48,000 in 2026. 26,000 business miles, Lyft's fees and the business share of the phone bill bring business expenses to $22,050, so net earnings are $25,950.
Self-employment tax is $3,667. After half of it, the $16,100 standard deduction and a QBI deduction of $1,603, taxable income is $6,413 and federal income tax is $641. Illinois income tax at its flat rate of 4.95% is $397.
Total estimated tax is $4,705: about $90 a week to set aside, or $1,176 a quarter, with the rules on the methodology page.
Lyft tax questions
Does Lyft take out taxes?
No. Lyft drivers are independent contractors, so nothing is withheld from ride earnings or bonuses. The tax on a year of driving is due through quarterly estimated payments and your return.
Why is my Lyft 1099-K more than I was paid?
Because it shows what passengers paid for your rides, before Lyft took its share. Report the 1099-K amount as income, then subtract Lyft's fees as a business expense; the Annual Summary in the Driver Dashboard lists them.
Can I use the online miles in my Lyft Annual Summary?
They are a record of what the app tracked, and a good check. The IRS asks you to keep your own log of business miles with the date, miles and purpose of each trip (Publication 463), so use the summary alongside a log, not instead of one.
Are Lyft bonuses and referral payments taxed?
Yes. Streak bonuses, incentives and referral payments are income too; Lyft reports them on a 1099-NEC, separate from the 1099-K for rides. Add both to your earnings.
Quarterly payments
Nobody withholds tax from Lyft pay, so the IRS expects estimated payments for 2026 on April 15, 2026; June 15, 2026; September 15, 2026; and January 15, 2027. The annual calculator shows your next payment and how to pay it.
Before you rely on it
This page and the calculator give estimates for planning, not tax advice. GigWorkerTax is an independent site and is not affiliated with or sponsored by Lyft, and not connected to the IRS. Lyft is a trademark of its owner, used here only to say who this page is for. See the disclaimer.
For every deduction, credits and your next IRS payment, open the annual calculator set up for Lyft.
Sources, checked October 8, 2026: Lyft: driver tax documents · IRS: Understanding your Form 1099-K · IRS Gig Economy Tax Center · IRS Publication 463 (car expenses).