You can find them by going into the Dasher app and selecting Earnings. You should also receive a copy of Form 1099-NEC confirming your total for the year. Being a self-employed delivery driver definitely has its perks. You never know where you’ll go next, and there’s nobody looking over your shoulder. And if you know all the DoorDash tips and tricks, you can stand to make a lot of money. Given the rise of popularity in these types of jobs, the major tax software programs have now created workflows specifically meant to make filing your DoorDash taxes easier.
What Doordash Tax Forms Will You Need to File?
This is true for anyone working as an independent contractor, whether that’s delivering for DoorDash, shopping for Instacart, or even working as a freelancer. It’s your responsibility as a Dasher to withhold money from your payments so you can pay your federal and state DoorDash taxes. Yes, DoorDash sends Dashers a 1099 form by mid January the following year through Stripe. Upload your tax forms and Keeper will prep your return for you.
Now that you know what you owe in taxes, it’s time to determine if the bill has already been paid. There’s another piece of the puzzle for Dashers who made a profit. Once you’ve determined your income tax bill, you need to add other taxes to that bill. Use a designated column or tab for your mileage on a spreadsheet or download an app to keep track of the total miles driven for DoorDash. As independent contractors for DoorDash, no wages are withheld or deducted, so a DoorDash W2 isn’t necessary. You’ll still how to file doordash taxes be required to report any income earned as an independent contractor with DoorDash, even if it was less than $600.
Save for tax time
These DoorDash tax deductions apply to employees and self-employed workers. They cover social security (6.2%) and Medicare taxes (1.45%). To file in time for Tax Day, the deadline to file DoorDash tax forms by mail is February 28th.
How to take your DoorDash write-offs
Again, while you may be able to take any of the above deductions, you have to choose actual expenses or the federal mileage deduction on your Doordash taxes. Dashers who make over $600 on the platform will be sent a 1099-NEC form via Stripe, which is the payment platform DoorDash partners with. There is no downside to deducting all related business expenses. The more qualified and related expenses you deduct, the more you reduce any tax burden on your income down to zero and minimize any payments you may need to make to the IRS. So you will need to calculate whether the benefit of avoiding a servicing fee is worth potential tax headaches down the road. IRS Form 1099-NEC is the only tax form that Dashers will receive from the company if they make $600 or more during the fiscal year.
In general, food write-offs are more limited, so double-check if your situation qualifies. The key is to track your expenses carefully and only deduct what’s truly related to your delivery work. Keep receipts, use apps to log mileage, and store everything in one place. If you don’t report your Doordash income, you may face consequences such as penalties, fines, or legal actions from tax authorities. It is important to accurately report all sources of income, including earnings from such platforms, to comply with tax laws and regulations.
Keep a mileage log or use an app to track your work-related trips. A 1099 driver (which is what most delivery drivers are) works independently. You set your own schedule, choose your gigs, and handle your own taxes. When you deliver for gig apps, you’re not considered an employee. This means no one is taking taxes out of your pay, and you’re in charge of reporting all your earnings to the IRS. Health insurance is important, especially to an independent contractor who doesn’t have an employer plan.
- Upload your tax forms and Keeper will prep your return for you.
- A professional can help you avoid costly mistakes, find deductions you might’ve missed, and even help you prepare for next year.
- Select the “Get Started” option in the Stripe invite email you receive and set up your Stripe account.
- (You can see those by checking Payfare, using your DasherDirect By Payfare account.) Your 1099 will include your DasherDirect earnings, though.
- These deductions and income adjustments are subtracted from your total income to determine taxable income.
Dashers and IRS Tax Audits
Finally, subtract refundable credits and previous tax payments (and withholding) from the outstanding balance. If payments and refundable credits exceed the balance, you get a refund for the difference. Consult with your tax professional to learn more about if you qualify for any of these. If you’re in the 10% tax bracket, a $500 tax deduction might reduce your tax bill by $50. However, a $500 tax credit reduces the tax bill by the entire $500.
For this reason, this is the one tax item that can get a lot of drivers in trouble. A common mistake is to think you can’t claim expenses unless you itemize your personal deductions. Too many Doordash drivers pay too much in taxes because of this. Because Dashers are self-employed, you’re not subject to tax withholding and must make estimated tax payments instead. The only exception is if you expect to owe less than $1,000 in ordinary income and self-employment taxes for the year.
First, note that DoorDash only sends the 1099-NEC forms to Dashers who’ve earned at least $600 during the previous calendar year. This means if you work with DoorDash as a full-time gig with no W-2 employer to cover half of the bill, your self-employment tax rate goes up to 15.3%. If you earned $600 or more as a Dasher in 2023, you’re eligible to receive a form called the 1099-NEC via email. The IRS has a short-term payment option, which gives you 180 days to pay your balance without setup fees. You can also apply for a long-term installment plan that has additional costs. Penalties and interest may still be assessed if you have a payment plan.
- Increase your desired income on your desired schedule by using Taxfyle’s platform to pick up tax filing, consultation, and bookkeeping jobs.
- You may also have to pay to park sometimes while you’re completing your deliveries, and you can claim deductions on the parking fees.
- You cannot get a refund if non-refundable tax credits exceed your income tax bill.
When filing your tax return, report all DoorDash earnings under “business income.” This includes deliveries, tips, and any bonuses. Since DoorDash doesn’t withhold taxes, you’re responsible for both income taxes and self-employment tax on your earnings. Quarterly taxes may also apply if you expect to owe over $1,000 for the year. For self-employed people, filing form 1040 is standard, with additional schedules for business expenses.
If you drive your car for your deliveries, every mile is a 65.5 cent reduction of taxable income (2023). Refundable credits include Earned Income Credit, a portion of the Child Tax Credits, and a few others. These are like cash payments; if the credits are more than your tax bill, you get a refund. Schedule C profits are moved to form Schedule SE, where self-employment taxes are calculated at 15.3%Employees don’t often think about these because they don’t have to file anything. Because we’re not employees, Doordash does not take out taxes from pay.
As a Dasher, the 1099 tax form is what enables you to file taxes like a responsible citizen. Once you receive the email, log in to your Stripe Express account and navigate to your “tax forms” section to view your form and make any necessary corrections. If you don’t consent to an e-delivery, Stripe Express will mail your 1099 tax form to the address on your DoorDash account. Ensure your address is accurate and up-to-date if you prefer this option. Self-employed people like Dashers are also required to pay both federal and state-independent income taxes. There are two main tax categories that you’re liable to pay as a Dasher.
Besides vehicle costs, you can also deduct the other miscellaneous expenses you incur while Dashing. For example, that includes the business portion of your phone bills since you need the device to access the DoorDash mobile app. Keeper is the top-rated all-in-one business expense tracker, tax filing service, and personal accountant.
However, while you will save any fees you would have given to a tax professional or tax software company, be aware that there is a risk in filing your own taxes. You can opt for the actual expense method if your vehicle operating expenses exceed the standard mileage deduction. Instead of deducting your business mileage, determine your expenses for business-related travel.