Maximize Your Tax Return As a Lyft Driver: Additional Expenses When it comes to being a Lyft driver, knowing which expenses are tax deductible can help you get the most out of your annual returns. This is an in-depth look into the deductions!
Vehicle-Related Expenses
Because your car is the most important piece of equipment you have to do business, there are two takes out that will help you with this purpose.
Standard Mileage Rate: This is a fixed rate per mile driven for Lyft (For instance, $0.655/mile in 2023).
Actual Expense Method — This method involves tracking all costs associated with the vehicle such as :
Fuel
Repairs and maintenance
Insurance premiums
Depreciation
Monthly lease payment
With both methods, one can deduct parking fees and tolls for a car being driven.123
2. Operational Costs
Beyond car costs, Lyft drivers can also write off a number of other expenses that go toward keeping their business moving:
Lyft Fees — Any commissions or fees extracted from your pay by Lyft are analyzable.Lyft driver tax deductions (ad)
Snacks and refreshments: Making sure that your passengers have snacks or drinks while they are on their journey is a simple way to improve the quality of service, with this being claimed as an acceptable business expense.
Cell phone expenses — The business use portion of your cell phone bill, if you conduct an interview while driving. If you buy a separate phone just for driving, then the expense of that may be fully written-off.
Supplies and Accessories: Beyond your personal weapon cache, other items like USB chargers, cleaning supplies even floor mats can be written off as necessary tools required to run a business.125
Additional Considerations
Keeping detailed records will help you prove those expenses when the time comes to claim them on your taxes. Here are some other deductions to think of.
Deduct Health Insurance Premiums- self-employed, partially.
Home Office Deduction: You can take a portion of your housing expenses if you have an area in your home used exclusively for business purposes.
Training and Education:When you take a course or training, that expense can also qualify to inscribe the total driving costs436.
These deductions can then result in a significant reduction of the amount they owe as part of their taxable income, maximizing how much Lyft drivers will be able to save when it comes time for tax season.
