Lyft Driver Taxes in Nevada - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Lyft Drivers in Nevada

Navigating the vibrant streets of Las Vegas and Reno as a Lyft driver offers flexibility, but also brings tax responsibilities. As an independent contractor, earnings from Lyft are subject to both federal and, while limited, state considerations.

The IRS requires all Lyft drivers to report their income on Schedule C (Profit or Loss from Business) with Form 1040. Crucially, income exceeding $400 necessitates the payment of self-employment taxes, covering both Social Security and Medicare contributions, which are not automatically withheld from your Lyft payouts. Accurate record-keeping throughout the year is paramount for a smooth tax filing process.

How Nevada Handles Gig Worker Taxes

Nevada distinguishes itself as one of the few states with no state income tax. This means Nevada drivers are not subject to a state income tax on their Lyft earnings. However, this does not exempt drivers from federal tax obligations. The lack of state income tax can sometimes lead to underestimation of overall tax liability, as drivers may not be accustomed to proactively setting aside funds for federal taxes. Furthermore, while Nevada doesn’t have a traditional income tax, businesses operating within the state, including independent contractors like Lyft drivers, may be subject to the Modified Business Tax (MBT). The MBT is a payroll tax, but if your net profit exceeds $50,000, you may be required to pay it. It’s important to note that the MBT is calculated differently than income tax and has its own filing requirements. Nevada also doesn't have a specific classification for "gig workers" beyond the standard independent contractor status, meaning all standard IRS rules apply. Staying informed about federal tax laws and potential MBT obligations is crucial for Nevada Lyft drivers. For more information on Nevada business taxes, please visit the Nevada Department of Taxation: https://tax.nv.gov/

Top Tax Deductions for Nevada Drivers

• Standard Mileage: The most popular and often most beneficial deduction. For the 2025 tax year, the standard mileage rate is 70 cents per mile. Given Nevada’s sprawling cities and the distances often covered, this deduction can significantly reduce taxable income.
• Tolls & Parking: While Nevada doesn’t have extensive toll roads, 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 detailed records of business use versus personal use to justify the deduction.
• Vehicle-Related Costs: Expenses like car washes, air fresheners, phone mounts, dash cams, and insulated food/drink carriers used specifically for Lyft driving are deductible.

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

Understanding the 15.3% Self-Employment Tax

As an independent contractor, you are responsible for paying self-employment tax, which covers both Social Security and Medicare. This combined tax rate is 15.3% on net earnings exceeding $400. Lyft and other ride-sharing platforms do not withhold these taxes from your earnings, so it’s essential to plan for this liability throughout the year, potentially through quarterly estimated tax payments to avoid penalties.