Lyft Driver Taxes in Utah - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Lyft Drivers in Utah

Navigating the scenic routes of Salt Lake City and Provo as a Lyft driver offers flexibility, but also brings tax responsibilities. As an independent contractor, earnings from Lyft are considered self-employment income, requiring careful tracking and reporting to both the IRS and the State of Utah.

The IRS requires 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. Platforms such as Lyft do not withhold these taxes, making proactive tax planning essential.

How Utah Handles Gig Worker Taxes

As a resident of Utah, filing a state income tax return is required, even if no federal tax is owed. Utah operates under a flat income tax rate, currently at 4.85% for the 2025 tax year. This means all taxable income is subject to the same rate, simplifying the calculation process. Lyft drivers, being self-employed, will report their net earnings (income after deductions) on Form TC-40, Utah Individual Income Tax Return. Self-employment income is also subject to Utah’s adjusted gross income (AGI) calculation, potentially impacting other state tax credits or deductions. Utah also allows for a deduction for qualified business income (QBI), which may further reduce your tax liability. It's important to note that Utah follows federal guidelines regarding deductions, meaning many of the deductions available at the federal level (detailed below) are also applicable at the state level. Keep meticulous records of all income and expenses to accurately calculate your Utah tax obligation. The Utah State Tax Commission provides comprehensive resources and guidance for self-employed individuals; access their information at https://tax.utah.gov/. Failure to file and pay state taxes on time can result in penalties and interest.

Top Tax Deductions for Utah Drivers

• Standard Mileage: The most popular deduction for Lyft drivers. For the 2025 tax year, the rate is 70 cents per mile. Given Utah’s relatively moderate gas prices compared to states like California, the standard mileage rate is often the most advantageous method for maximizing deductions.
• Tolls & Parking: While Utah 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 monthly phone and data bill used for Lyft driving is deductible. Keep a log of the percentage of time your phone is used for work versus personal use to justify the deduction.
• Vehicle-Related Costs: Expenses like car washes, air fresheners, phone mounts, dash cams, and insulated food bags (for delivering food via Lyft) are deductible as ordinary and necessary business expenses.

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

This tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. Because Lyft and other gig platforms do not withhold these taxes from your earnings, it’s crucial to estimate your tax liability throughout the year and make quarterly estimated tax payments to the IRS and the State of Utah to avoid penalties.