Most Uber and Lyft drivers are sole proprietors who will report their ride share earnings on the Schedule C tax form, but some of you may have an LLC, corporation, or other tax entity that you prefer to operate under.
It’s a smart move — by reporting your Uber and Lyft earnings under the umbrella of a corporation, you may be able to lower your tax bill.
Neither Uber nor Lyft makes it totally clear how to have your earnings filed under your Employer ID Number (EIN) or another tax ID.
And after you do figure out how to navigate each Uber & Lyft’s tax reporting system, there’s often not a lot of reassurance that you’ve done it right and everything will be correctly reported at tax time.
I’ve operated as an Uber and Lyft driver under my S-Corp for a few years now, so I’ll walk you through how you can let Uber and Lyft know that you are operating under an EIN or another tax classification.
And I can tell you to expect at tax time each year.
Which tax classifications does Uber accept?
Uber allows you to operate under many different tax classifications. By default, drivers are individuals/sole proprietors, but Uber also allows drivers to operate under the following tax classifications:
- Individual/Sole Proprietor
- C Corporation
- S Corporation
- Limited Liability C Corporation
- Limited Liability S Corporation
- Limited Liability Partnership
- Single member LLC under a business entity
- Single member LLC with individual as sole owner
- Partnership
- Trust/estate
How to set your tax classification with Uber
In the Uber Driver app, tap Menu > Account > Tax Info > Tax Settings.
On the tax settings screen, you can select your federal tax classification, and enter your company legal name, DBA, and EIN.
Change your tax settings in the Uber Driver app
Options on the Uber Tax settings page
How to set your tax classification with Lyft
Lyft allows drivers to select two tax classifications: Individual, or Corporation/LLC.
There are two ways to change your tax classification settings with Lyft.
Lyft Driver App Instructions
Select Menu > Account > Pay and Tax Info > Scroll to Tax Info.
Those steps will direct you to your profile page at Lyft.com, where you can update your info.
Lyft.com Instructions
- Log in at Lyft.com/login
- On the left menu, click “Payout Information”
- Click the edit button
- Enter the relevant info. Classification, EIN, etc
- Click Save
After you have successfully entered your info, the Tax Classification should be the entity that you entered.
Lyft’s system never displays any part of your EIN displayed on screen after you submit it, and if you re-click “Edit Tax Info,” the EIN field is blank.
The blank EIN field may make you feel like Lyft hasn’t correctly received or stored your info, which is not reassuring. But in my experience, Lyft does receive and use the info you input.
Go to Lyft.com/login and click Payout Information
Enter your tax classification and EIN
You can also use an EIN with other top gig companies
You can use your business entity for any 1099 work that you do.
When you are completing your tax info or filling out a W-9, use your EIN or other business entity to be taxed as that entity.
You can use your EIN at top gigs like:
- DoorDash
- Instacart
- Shipt
- Amazon Flex
- …and any other gig app that has you fill out a w-9 or classifies you as a 1099 contractor
What happens at tax time?
One of my fears when I first created my S-Corp was that Uber and Lyft would file a 1099 under my SSN, and I’d either have to spend time correcting that with Uber and Lyft or pay the higher tax rate of a sole proprietor.
Neither company spells it out in huge letters that you’ve correctly listed your EIN, and they don’t specifically say that your income will be reported to your EIN. For a new corporation holder, that might be scary. It was for me.
In my experience, both companies sent me a 1099 in January that listed my EIN and corporation name rather than my SSN.
I’ve learned that companies don’t need to send a 1099 to a corporation, but Uber and Lyft do.
I appreciate getting the 1099s because they reassure me that the income has been properly attributed to my EIN.
So when you file your taxes or have someone else prepare your taxes, you can be assured that the IRS knows that your income is tied to your EIN, not your SSN.
Shawnte says
Hello Doug, I have a few different LLCs setup for different businesses. Will I need to setup another just to drive for Lyft or can I use an LLC that’s already setup and use that as the business that I operate Lyft services under?
DougH says
I’m fairly sure that you can use an existing one. Who says a business can’t do a little bit of everything? But I’m not a tax attorney or a CPA, so you might want to ask them just to be 100% sure. I use one C corp for my driving income and for website income and it’s been ok so far.
Erik says
Hey Doug, I just found your website and thank you very much for sharing this info. I’m S Corporation owner in California. And It’s my first year and so scary (well it’s technically second because I opened in November 2016, paid someone to do my taxes with 0 income), I do not have any idea how I should run S Corporation. I feel so lucky that I found your website, because I do Uber and Lyft too. May ask you question, do you pay your self salary? Or how it all works with money you make or your company makes?
DougH says
Yes, I pay myself a salary. I’ve felt pretty lost in the complicated process too, so my CPA has been a big help. In the end, I make sure to keep business and personal expenses separate, keep great records, and ask my CPA lots of questions.
Devon Jones says
Hey Doug,
What state is your LLC operating in, and if you work in other states can you still use your EIN to report any other income you have earned in another state?
DougH says
I’m in CA. I don’t feel qualified to answer your other question. You may need to talk to a tax preparer or CPA.
Miguel Espinoza says
Hi I do Uber and lyft as part time in Chicago. I am thinking about doing it full time creating a CORPORATION but I am not sure if I need to change the car’s insurance under the corporation’s name.
DougH says
You won’t need to change the car’s insurance over to the corporation.
Erik says
Really? I bought commercial insurance and it costs me about $350 a month. I have TCP tho
Tracey Tello says
My name Tracey
I work partime for uber/ lyft on weekends .
I am looking to drive fulltime uber /lyft/ safhr and open S-CORP as business . Any thoughts would this be beneficial for me
Tracey Tello says
My name tracey
I am trying to get info on Opening LLC Ma. I would be makeing career change driving fulltime uber , Lyft, Safr all rideharing comapny’s I just purchased rideshare insurance threw PlymouthRock have full coverage including gap insurance. My question is it worth money to make LLC. Some people said to too expensive not waste money.
My tax guy told me i would save alot money plus make more paly my taxes monthly .
DougH says
It depends on which state you’re in. In my state, LLC’s cost $800/year and the tax benefits don’t really start to add up unless you make more than $80,000. If the LLC is expensive to keep up then it may not be worth it.
Alex says
I currently drive for Uber in Chicago but I would like to make a corporation accounts under my wife’s name and I drive under for her basically, can this work my accountant says it does
DougH says
I think that’s possible but I’m not exactly sure how to set it up. You’ll have to contact Uber about that.
Erik says
Yes it does. My friend does exactly same thing. And I was driver under her wife’s company for couple of months.
maria garcia says
When you say you where driving under her company what do you mean. I look at myself as a sub contractor of Uber. Are you saying I can be a sub contractor of Uber then sub contract my rides to others. Please explain what you mean by you drove for your friends wife company. Thank you.