Lyft Driver Taxes in Idaho - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Lyft Drivers in Idaho

Navigating the scenic routes and delivering friendly service as a Lyft driver in the Gem State 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. Earnings exceeding $400 necessitate the payment of self-employment taxes, which cover both Social Security and Medicare contributions. Accurate record-keeping throughout the year is essential to maximize deductions and minimize tax liability.

How Idaho Handles Gig Worker Taxes

As a resident of Idaho, filing a state income tax return is required, even if no federal tax is owed. Idaho operates under a flat income tax system, meaning all income is taxed at the same rate. For the 2025 tax year, the Idaho income tax rate is 5.8%. Lyft drivers operating as independent contractors will report their business income and expenses on Schedule C of Form 40, Idaho Individual Income Tax Return. The primary form for self-employed individuals is Form 40, and Schedule C is attached to calculate net profit or loss. Idaho also requires the payment of estimated taxes quarterly if a driver anticipates owing more than $1,000 in state income tax. Failure to pay estimated taxes can result in penalties. Idaho’s tax laws generally follow federal guidelines for deductions, meaning many of the deductions available at the federal level are also permissible at the state level. It’s important to note that Idaho does not have a separate self-employment tax; the self-employment tax is calculated on your federal return and then factored into your Idaho income tax calculation. Resources and further information can be found on the Idaho State Tax Commission website: https://tax.idaho.gov/. Keep detailed records of all income and expenses to ensure accurate reporting and maximize potential tax savings.

Top Tax Deductions for Idaho Drivers

• Standard Mileage: The most popular deduction for Lyft drivers. For the 2025 tax year, the rate is 70 cents per mile for business use. Given Idaho’s relatively moderate gas prices compared to states like California or Washington, the standard mileage rate is often the most advantageous method.
• Tolls & Parking: While Idaho doesn’t have extensive toll road systems, any tolls incurred while actively driving for Lyft are deductible. Parking fees directly related to pickups and drop-offs are also deductible.
• Phone & Data Plan: The portion of your cell phone and data plan used for Lyft driving is deductible. Keep a log of business use to accurately calculate the percentage.
• Vehicle-Related Costs: Expenses like car washes, air fresheners, phone mounts, dash cams, and insulated food bags used for deliveries are deductible.

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

Understanding the 15.3% Self-Employment Tax

This 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 combined rate of 15.3% applies to your net earnings (income minus business expenses) exceeding $400. Platforms like Lyft do not withhold these taxes, so planning for this expense is vital.