Lyft Driver Taxes in Wisconsin - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Lyft Drivers in Wisconsin

Navigating the scenic routes and bustling cities of Wisconsin 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 attention to both federal and state tax obligations.

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 Wisconsin Handles Gig Worker Taxes

As a resident of Wisconsin, a state income tax return is required, regardless of income level. Wisconsin utilizes a graduated income tax system, meaning the tax rate increases as your income rises. This means the amount of tax owed will vary based on your total taxable income for the year. Lyft drivers operating in Wisconsin will need to report their self-employment income on Schedule 1 of Form 1040-ES, and then transfer that amount to Form 1040, Wisconsin Return. The primary form for self-employed individuals in Wisconsin is Form 1040-ES, Estimated Tax for Individuals, used for paying estimated taxes throughout the year, and Form 1040, Wisconsin Return, used for filing the annual state income tax return. Wisconsin also requires you to file Schedule SE (Self-Employment Tax) to calculate your self-employment tax liability. It's important to note that Wisconsin conforms to many federal tax rules, but there can be state-specific adjustments and credits available. Wisconsin also offers a deduction for qualified business income (QBI), which may reduce your state tax liability. Staying informed about changes to Wisconsin tax laws is essential.

For more detailed information and resources, please visit the Wisconsin Department of Revenue website: https://www.revenue.wi.gov/

Top Tax Deductions for Wisconsin 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 Wisconsin's variable weather conditions and potential for significant mileage, this rate can result in substantial savings.
• Tolls & Parking: While Wisconsin 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: If you use your personal phone for Lyft driving, you can deduct the percentage of your monthly bill that corresponds to business use. Keep a log of the time spent driving to accurately calculate this percentage.
• Vehicle-Related Costs: Expenses like car washes, air fresheners, phone mounts, dash cams, and insulated food bags used for deliveries are deductible. Maintain receipts for these purchases.

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. This tax applies to your net earnings – your gross income minus business expenses – exceeding $400. Paying estimated taxes quarterly can help avoid penalties at the end of the year.