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.
Khurts says
Hi Dough, i tried to use EIN to open lyft driver account. But they denied it. But your article saying we can use EIN. Could you it clear that whether we can open lyft account using only EIN, without SSN?
DougH says
You have to open your account with an SSN. Once you are an approved driver, you can give them your EIN for tax purposes. But first they need the SSN to do background screening
DerekN says
First when you say most are Sole proprietor is that because it is automatically done when you start?
Also do you have a post on how to do this with delivery apps like Postmates, Doordash, GrubHub? Is the process the same?
DougH says
Yes, I say most are sole proprietor because that is the automatic default. I really should say “all” are sole prop unless you otherwise specificy.
It is the same with the other companies you listed, and most on-demand companies that hire 1099 workers: By default you’re a sole proprietor, and it’s possible to give each company your EIN.
Pat says
Hello! Thank you for all the info. Can you let me know what kind business
Would work better for Uber?
DougH says
I think a Sole Proprietorship is ok for most part-time drivers. If you want to go full time, an LLC could work well in a state where they aren’t too expensive to run.
Richard says
Hi Doug my wife and I do lyft and Uber can we both use the same EIN number ? Also this money will go to the business not to us correct ?
DougH says
I believe you can, but you should double check with a tax preparer or CPA. You can both list the same EIN in your tax information in your driver profile
Ryan says
This may seem like a dumb question, but are there any disadvantages to having a 1099 filed under your EIN vs SSN?
DougH says
That’s a good question! Just as a disclaimer: I’m not a CPA, but I can do my best to answer. Having your income reported to an EIN can help you reduce self-employed taxes. See this legal zoom article for more detail. The disadvantage there is the extra cost of operating a business entity, and the complexity of preparing your taxes.
Mike says
If I start a company with an s Corp or LLCs will the monies earned by myself and my wife will at tax time will it show was paid to my the Corp or each of us individually ????
DougH says
It will show as being paid to the corporate identify
Ana Reyes says
Hi doug how is your day going hopefully good 🙂 just wanted to ask if i get deactivated from lyft can i ever reapply ???
DougH says
Hello :-). You can reapply to Lyft, but you usually have to wait around 6 months. And you have to reapply via customer support at help.lyft.com, not the regular application.