How to Do Your DoorDash Taxes Correctly

As a DoorDash driver, you are an independent contractor with distinct tax responsibilities. This guide clarifies these obligations for effective tax management.

Understanding Your Tax Status and Income

DoorDash drivers are independent contractors, meaning DoorDash does not withhold income, Social Security, or Medicare taxes. You are responsible for calculating and paying these taxes.

Your income includes all earnings from deliveries, customer tips, and bonuses or incentives. All these amounts contribute to your gross income. All income earned must be reported, even without a specific tax form.

If your gross earnings exceed $600 in a calendar year, DoorDash typically issues Form 1099-NEC, Nonemployee Compensation. This form reports your total nonemployee compensation. You must report all income, regardless of receiving a 1099-NEC.

Identifying Allowable Business Expenses

Tracking business expenses is important for managing your tax liability. These are costs considered “ordinary and necessary” for your delivery business. Deducting them can reduce your taxable income.

Vehicle expenses are often the largest deduction. You have two options: the standard mileage rate or actual car expenses. The 2024 rate is 67 cents per mile; 2025 is 70 cents. This rate covers gas, oil, maintenance, repairs, and depreciation. A detailed mileage log is essential for this method.

Alternatively, you can deduct actual car expenses by tracking all costs related to your vehicle’s business use. This includes gasoline, oil changes, repairs, insurance, registration fees, and depreciation or lease payments. If your vehicle is used for both personal and business purposes, allocate expenses based on business mileage.

Other deductible expenses include a portion of your cell phone bill and data plan, essential for orders and navigation. Costs for insulated delivery bags, blankets, or other specialized equipment are also deductible. Road tolls and parking fees incurred during active deliveries can be deducted.

Self-employed individuals can deduct half of the self-employment tax paid. This deduction impacts your income tax, not the self-employment tax itself. If you pay for your own health insurance and are not eligible for employer-sponsored coverage, those premiums may also be deductible.

A home office deduction might be available if a specific area of your home is used exclusively and regularly for your DoorDash business. You can use a simplified method or calculate actual expenses. Professional fees for tax preparation related to your DoorDash business are also deductible.

Calculating Your Taxable Earnings

Determining your taxable earnings is straightforward: start with your total DoorDash income and subtract all allowable business expenses. The result is your net self-employment earnings.

This net earnings amount is reported on Schedule C, Profit or Loss From Business, part of your federal income tax return. Schedule C summarizes your business income and expenses, showing your net profit or loss. A net profit indicates income subject to self-employment and income tax.

Net earnings from Schedule C are used to calculate your self-employment tax. This tax covers your Social Security and Medicare contributions, typically withheld by an employer. For 2024, the self-employment tax rate is 15.3% (12.4% for Social Security, 2.9% for Medicare). Schedule SE, Self-Employment Tax, computes this amount.

The self-employment tax applies to 92.35% of your net earnings. There is an annual limit on earnings subject to the Social Security portion ($168,600 for 2024), but no income limit for Medicare. The calculated self-employment tax is reported on Form 1040.

Meeting Your Filing and Payment Obligations

As a self-employed DoorDash driver, you have specific filing and payment requirements. Most self-employed individuals file Form 1040, U.S. Individual Income Tax Return, along with Schedule C and Schedule SE. These forms integrate your business income and self-employment taxes into your overall individual tax return.

Independent contractors must pay estimated taxes. Since DoorDash does not withhold taxes, you are responsible for paying income and self-employment tax throughout the year. Estimated taxes are generally required if you expect to owe at least $1,000 in tax.

Estimated tax payments are typically made quarterly. For 2025 income, due dates are April 15, June 16, September 15, and January 15, 2026. If a due date falls on a weekend or holiday, the deadline shifts to the next business day. Payments can be made electronically via IRS Direct Pay, EFTPS, or by mail using Form 1040-ES vouchers.

Failing to pay enough estimated tax can result in underpayment penalties. Estimate your income and expenses accurately to avoid these penalties. You can adjust estimated payments throughout the year if your income or deductions change.

The annual tax filing deadline is typically April 15. If you need more time, request an extension using Form 4868. This grants additional time to file, but not to pay taxes owed. Any tax liability must still be paid by the original April 15 deadline to avoid penalties and interest.

Keeping Proper Tax Records

Maintaining accurate tax records is important for self-employed individuals. Record-keeping supports your tax returns, helps substantiate deductions during an audit, and provides business performance insights. You are responsible for proving entries, deductions, and statements on your tax returns.

Keep records of all DoorDash earnings, accessible through the app or portal. Bank statements showing business income and expenses provide a clear financial trail. Detailed mileage logs are essential for vehicle expenses, including dates, odometer readings, total miles, and business purpose.

Keep all receipts for business expenses, physical or digital. This includes receipts for fuel, maintenance, phone accessories, insulated bags, tolls, and other delivery-related purchases. Vehicle maintenance records are also important if you choose the actual car expense method.

For most tax purposes, keep records for at least three years from your original return filing date, or two years from tax payment, whichever is later. The IRS may look back up to six years for significant income underreporting. Retain tax returns and supporting documents for three to seven years, or longer for property records.

Various tools can assist with record-keeping, including spreadsheets, accounting software, or mileage tracking applications. Choosing a system for easy data capture and organization will simplify tax preparation and ensure necessary documentation.