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.
Joseph says
Hello Doug,
I’ve been planning to set up my uber/lyft business just the same as you have. With the Facebook, YouTube, Twitter, Instagram and all of it under an LLC. my question is this. . . Can I set all of the social media accounts up first and then transfer them into the ownership of the LLC or does the LLC have to be created first? I’ve only been driving part time for 4 months and I already get people Snapchatting in my car about 10 times a night and begging if I have a hashtag and all sorts of stuff so I want to get it all set up but I need to make sure I do it in the proper order
DougH says
I am not a lawyer or a CPA, so take this with a grain of salt: I don’t think it matters too much the order you do it in. Your social media accounts won’t be directly receiving payments, so you don’t need to worry about what type of identity they fall under. But if you ever take on business partners or employees, you may need to clear up who exactly owns those accounts. In the mean time, set up the accounts and start using them.
Chelsey says
Why do I have to input my Ssn for the ein app? Does this not link back to my ssn for tax purposes? I do t want to report income under my name. I just wanted some input
DougH says
I’m not clear on what you’re asking. But for Uber, you can choose what kind of identify you want to be treated as (individual or corporation), then enter the appropriate number.
Maria Martins says
If I sign up as LLC for uber driver do I have to transfer my car to my LLC? Do I need just my company’s name and EIN to sign up or do I also have to complete my own personal information?
DougH says
No, the car does not have to be under an LLC
Thomas says
How can i apply EIN?
DougH says
In the tax info area of the driver dashboard. It may not be exactly where I described it in this article, but it’s there.
Tracey says
Hi Doug
I was interested in LLC or s CORP when I looked into it you need insurance to cover scorp or LLC . I live in Boston mass. Could not find insurance . They said I would have to pay thousands to livery .can you please email me back I have Plymouth Rock for my insurance plus have gap insurance as well. Thanks Tracey
DougH says
If that’s the case, it may not be worth it because of your local regulations.
Christian says
Thanks for all the information!!!
Junior says
Hello, Doug
I have a few questions. You said you have operated as a Lyft driver for two years now. My question is when you setup your bank information for direct deposit, Did you use a personal account or did you use a business account? On the lyft website: “https://help.lyft.com/hc/en-us/articles/214216927-Set-up-bank-and-tax-info-to-get-paid” it says they can only do direct deposit transfer to personal checking accounts. If lyft only does transfers to personal checking account, how would that work with a LLC without commingling funds. I did fill out the lyft W-9 Form with the business information but I would like to put my business checking account for the direct deposit. If this is not possible then how do you do it?
DougH says
I’m confused by the wording in that Lyft article. I’ve been using my business checking account for direct deposits for awhile now and I’ve never had an issue. I think Lyft might be talking about a special type of account that is somehow different from a checking account. Go ahead and input the info for your business account.