I am a US citizen who will have worked for 89 days in a Schengen country while on a 90-day tourist visa.
What exactly is my best strategy at US border control? Should I admit to working while travelling, or lie and say I was on vacation?
I fully intend to declare the income earned on my taxes for this year, but I simply want to minimize trouble at the border.
Nobody can tell you what to do. The choice is yours. USA immigration do not care that you worked illegally in another country and even if they knew they can do nothing about it and are not going to bother to inform the Schengen country, nor can they deny you entry into the USA.
With that in mind, i.e. adverse consequences essentially nonexistent, choose what answer to give US Border control.