Lyft Driver Taxes in Georgia - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Lyft Drivers in Georgia

Navigating the bustling streets of Atlanta or providing rides in Savannah as a Lyft driver offers flexibility, but also comes with tax responsibilities. As an independent contractor, understanding these obligations is crucial for a smooth tax season.

The IRS requires Lyft drivers to report their earnings on Schedule C (Profit or Loss From Business) with Form 1040. Because you are self-employed, no taxes are automatically withheld from your earnings. This means you are responsible for paying both income tax and self-employment tax – covering Social Security and Medicare – on any net earnings over $400. Accurate record-keeping throughout the year is essential to maximize deductions and avoid potential penalties.

How Georgia Handles Gig Worker Taxes

As a resident of Georgia, you are required to file a state income tax return, even if no Georgia income tax is ultimately due. Georgia operates under a flat income tax rate system, meaning all income is taxed at the same percentage. For the 2025 tax year, the Georgia income tax rate is 5.49%. Self-employed individuals, including Lyft drivers, will use Form 540 to report their income and calculate their tax liability. Georgia also allows for a standard deduction, which can reduce your taxable income. It's important to note that Georgia does not offer a separate state-level self-employment tax; however, the federal self-employment tax impacts your overall tax picture. Georgia also requires estimated tax payments if you expect to owe $1,000 or more in state income tax. Failing to make these quarterly payments can result in penalties. The Georgia Department of Revenue provides comprehensive information and resources for taxpayers, including gig workers, on their website: Georgia Department of Revenue. Keep detailed records of all income and expenses related to your Lyft driving activity to ensure accurate reporting and maximize potential deductions. Understanding Georgia’s tax laws, alongside federal requirements, is key to responsible tax compliance.

Top Tax Deductions for Georgia Drivers

• Standard Mileage: The most popular deduction for Lyft drivers. For the 2025 tax year, the standard mileage rate is 70 cents per mile. Given Georgia’s relatively moderate gas prices compared to states like California, the standard mileage rate is often the most advantageous method.
• Tolls & Parking: Georgia drivers frequently encounter tolls on highways around Atlanta and other metropolitan areas. Keep records of all toll expenses and parking fees paid for business purposes.
• Phone & Data Plan: If you use your phone for Lyft-related activities (navigation, accepting rides, etc.), you can deduct the percentage of your monthly bill that corresponds to business use.
• Vehicle-Related Costs: Expenses like car washes, air fresheners, phone mounts, dash cams, and insulated food bags (for delivering food via Lyft) are all deductible business expenses.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses (like gas, oil changes, or repairs) in the same tax year. Choose the method that yields the larger deduction.

Understanding the 15.3% Self-Employment Tax

The 15.3% self-employment tax covers both Social Security and Medicare taxes. Unlike traditional employment where these taxes are withheld from your paycheck, as a Lyft driver, you are responsible for paying both the employer and employee portions. This tax applies to your net earnings – your gross income minus your business expenses – exceeding $400.