Lyft Driver Taxes in Nebraska - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Lyft Drivers in Nebraska

Navigating the plains and providing rides through Nebraska’s cities and towns as a Lyft driver offers flexibility, but also comes with tax responsibilities. As an independent contractor, earnings from Lyft are considered self-employment income, requiring careful attention during tax season.

The IRS requires all Lyft drivers to report their income on Schedule C (Profit or Loss from Business) with Form 1040. Furthermore, because no taxes are automatically withheld from your Lyft earnings, drivers are responsible for paying self-employment taxes, which cover both Social Security and Medicare. Accurate record-keeping throughout the year is crucial for maximizing deductions and ensuring compliance.

How Nebraska Handles Gig Worker Taxes

As a resident of Nebraska, a state income tax return is required, regardless of income level. Nebraska utilizes a graduated income tax system, meaning the tax rate increases as your income increases. This means the amount of tax owed will vary based on your total taxable income for the year. Lyft drivers operating within Nebraska must report their self-employment income on the Nebraska Form 1040N, and will likely need to utilize Schedule I to calculate their adjusted gross income. The Nebraska Department of Revenue offers resources and guidance for self-employed individuals, including information on estimated tax payments. It’s important to note that Nebraska also has a standard deduction, which can reduce your taxable income. Furthermore, Nebraska allows for itemized deductions similar to the federal level, potentially offering additional tax savings. Failing to file a Nebraska state income tax return, or underreporting income, can result in penalties and interest. Nebraska also requires estimated tax payments if you expect to owe more than $1,000 in state income tax. Consulting with a tax professional familiar with Nebraska tax law is highly recommended to ensure accurate filing and maximize potential deductions.

You can find more information and resources on the Nebraska Department of Revenue website: https://revenue.nebraska.gov/

Top Tax Deductions for Nebraska 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 Nebraska’s relatively stable gas prices, the standard mileage rate is likely to be a beneficial option for most drivers.
• Tolls & Parking: While Nebraska doesn’t have extensive toll roads, 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 phone and data plan that is used for business purposes. Keep a log of your business usage to support this deduction.
• Vehicle-Related Costs: Expenses like car washes, phone mounts, dash cams, first-aid kits, and insulated food bags used for deliveries (if applicable) are deductible.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses (like gas, oil changes, repairs, insurance, and depreciation) in the same 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, totaling 15.3% on net earnings over $400. This is a significant tax liability, so planning and setting aside funds throughout the year is essential.