How to Calculate Your DoorDash Taxes

As a DoorDash driver, you are an independent contractor, not an employee. DoorDash does not withhold taxes from your earnings. You are responsible for calculating and paying your own tax obligations to the Internal Revenue Service (IRS). This guide covers understanding your income, identifying deductible expenses, calculating self-employment taxes, and making estimated tax payments.

Understanding Your DoorDash Income

As an independent contractor, your DoorDash income includes delivery payments, customer tips, and any bonuses or promotional earnings. Unlike an employee, no income tax, Social Security, or Medicare taxes are automatically withheld from these payments. You are responsible for reporting all income earned, regardless of the amount.

DoorDash provides an annual Form 1099-NEC, Nonemployee Compensation, if you earn $600 or more in a calendar year. Even if your earnings are less than $600, you must still report all income for tax purposes.

You can access your earnings summaries within the DoorDash app or through their driver portal. Reconcile your 1099-NEC with your in-app earnings for accuracy. Maintain meticulous records of all earnings, including those below the 1099-NEC reporting threshold, for accurate tax filing.

Identifying Deductible Expenses

Independent contractors can reduce their taxable income by deducting ordinary and necessary business expenses. An ordinary expense is common and accepted in your trade or business, while a necessary expense is helpful and appropriate for your business. These expenses directly relate to your DoorDash driving activities and are not considered lavish or extravagant.

Vehicle expenses are often the most significant deduction for DoorDash drivers. You can choose to deduct either the standard mileage rate or actual expenses. For 2025, the standard mileage rate for business use of a vehicle is 70 cents per mile. This rate accounts for the costs of gas, oil, repairs, insurance, and depreciation. To use this method, you must maintain a detailed mileage log, noting the date, mileage, destination, and business purpose of each trip.

Alternatively, you can deduct actual vehicle expenses by tracking costs like gas, oil changes, repairs, insurance premiums, and vehicle depreciation. This method often requires more meticulous record-keeping. Other common deductible expenses include a portion of your cell phone bill for DoorDash use. Costs for insulated bags, delivery supplies, and any tolls or parking fees incurred during deliveries are also deductible.

If you have a dedicated home space used regularly and exclusively for DoorDash administrative tasks, you may qualify for the home office deduction. This covers a portion of expenses like rent, mortgage interest, utilities, and homeowner’s insurance. Business licenses or permits required for your operations are also deductible. Keep accurate records, such as receipts and logs, for all expenses to support your deductions in case of an IRS inquiry.

Calculating Self-Employment Tax

Self-employment (SE) tax funds Social Security and Medicare for self-employed individuals. Unlike traditional employees who have these taxes withheld from their paychecks and split with their employer, independent contractors are responsible for both the employee and employer portions. The self-employment tax rate is 15.3%, consisting of 12.4% for Social Security and 2.9% for Medicare.

This tax is calculated on your net earnings from self-employment, which is your gross DoorDash income minus your deductible business expenses. To determine the amount subject to SE tax, you multiply your net earnings by 92.35%. This adjustment accounts for the employer-equivalent portion of the self-employment tax. For 2025, the Social Security portion of the tax (12.4%) applies to net earnings up to $176,100, while the Medicare portion (2.9%) has no income limit.

For example, if your net earnings are $50,000, you would first multiply $50,000 by 0.9235, resulting in $46,175 subject to SE tax. Then, you would calculate 12.4% of $46,175 for Social Security and 2.9% of $46,175 for Medicare. You can deduct one-half of your self-employment tax as an adjustment to income on your federal income tax return, which helps reduce your overall taxable income. This calculation is performed on Schedule SE (Form 1040).

Making Estimated Tax Payments

Independent contractors must pay estimated taxes throughout the year because no income or self-employment taxes are withheld from their DoorDash earnings. The U.S. tax system operates on a pay-as-you-go basis, meaning you are expected to pay taxes as you earn income. You generally need to make estimated tax payments if you expect to owe at least $1,000 in tax for the year.

These estimated payments cover both your income and self-employment tax obligations. To calculate your quarterly payments, estimate your total annual gross income, subtract anticipated deductible business expenses, and calculate your self-employment and income tax on the remaining net earnings. This total estimated tax liability is typically divided into four equal installments.

The general quarterly due dates for estimated tax payments are April 15, June 15, September 15, and January 15 of the following year. If any of these dates fall on a weekend or federal holiday, the deadline shifts to the next business day. You have several convenient methods for making these payments, including IRS Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or by mail with a Form 1040-ES voucher. Failing to pay enough estimated tax throughout the year can result in penalties for underpayment, even if you are due a refund when you file your annual tax return.