Lyft Driver Taxes in Mississippi - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Lyft Drivers in Mississippi

Navigating the Magnolia State as a rideshare driver with Lyft offers flexibility, but also brings unique tax responsibilities. As an independent contractor, earnings from Lyft are considered self-employment income, requiring careful tracking and reporting to both the federal government and the State of Mississippi.

The IRS requires all Lyft drivers to report their income on Schedule C (Profit or Loss from Business) when filing their federal income tax return. Furthermore, because no taxes are withheld from your Lyft earnings, drivers are responsible for paying self-employment taxes, which cover both Social Security and Medicare. Failure to properly report income and pay these taxes can result in penalties and interest.

How Mississippi Handles Gig Worker Taxes

As a resident of Mississippi, a state income tax return is required, even if no state income tax was withheld from your Lyft earnings. Mississippi operates under a flat income tax rate, meaning all income is taxed at the same percentage. For the 2025 tax year, the Mississippi income tax rate is 5%. Lyft drivers, classified as self-employed individuals, will report their earnings and deductible expenses on Mississippi Form 83-101, Individual Income Tax Return. This form allows for the calculation of your adjusted gross income and ultimately, your Mississippi state income tax liability. It’s crucial to accurately calculate your net profit from your Lyft driving business (total earnings minus deductible expenses) as this figure directly impacts your state tax obligation. Mississippi also allows for itemized deductions, which may further reduce your taxable income. Keep detailed records of all income and expenses throughout the year to ensure accurate filing. Remember to pay estimated taxes quarterly if you anticipate owing $1,000 or more in state income tax to avoid underpayment penalties. Resources and further information can be found on the Mississippi Department of Revenue website: https://www.dor.ms.gov/

Top Tax Deductions for Mississippi Drivers

• Standard Mileage: The most popular and often simplest deduction. For the 2025 tax year, the standard mileage rate is 70 cents per mile. Given Mississippi’s relatively lower gas prices compared to states like California, the standard mileage rate is likely to be a beneficial option for most drivers.
• Tolls & Parking: While Mississippi doesn’t have extensive toll road systems, any tolls incurred while actively driving for Lyft are deductible. Parking fees directly related to picking up or dropping off passengers are also deductible.
• Phone & Data Plan: You can deduct the percentage of your monthly phone and data plan that is used for business purposes. Keep a log of your business-related usage to support this deduction.
• Vehicle-Related Costs: Expenses like car washes, air fresheners, phone mounts, first-aid kits, and insulated food bags used for passenger comfort 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

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. Lyft and other rideshare platforms do not withhold these taxes from your earnings, so it’s essential to plan for this expense when filing your tax return.