How to Pay and File Your DoorDash Taxes

As a DoorDash driver, you are an independent contractor, not an employee. This means DoorDash does not withhold taxes from your earnings, placing the responsibility directly on you. You are accountable for reporting all income and paying your own income and self-employment taxes. This guide clarifies these responsibilities, from understanding your tax status to filing your annual return.

Your Tax Status and Income

DoorDash drivers operate as independent contractors, meaning you are considered self-employed for tax purposes. This classification differs from being an employee, as DoorDash does not deduct taxes from your paychecks. Instead, you are responsible for calculating and paying both your income tax and self-employment tax.

Self-employment tax covers your contributions to Social Security and Medicare. As a self-employed individual, you pay both portions, totaling 15.3% on your net earnings from self-employment. This rate includes 12.4% for Social Security (up to an annual threshold) and 2.9% for Medicare (on all net earnings). For 2024, the Social Security portion applies to the first $168,600 of your combined wages, tips, and net earnings.

All earnings from DoorDash, including delivery pay, tips, and bonuses, are taxable income. DoorDash issues Form 1099-NEC (Nonemployee Compensation) if you earn $600 or more in a calendar year. Even if you earn less than this threshold and do not receive a 1099-NEC, you must still report all income to the IRS.

Tracking Income and Expenses

Maintaining accurate records of your income and expenses is crucial for managing your tax liability. This helps ensure you report earnings correctly and claim eligible business deductions, which can reduce your taxable income. Using spreadsheets, accounting software, or mobile applications can streamline record-keeping.

While DoorDash provides income summaries and 1099-NEC forms, track your earnings independently to verify accuracy. Tracking expenses is where substantial tax savings can be realized. Deductible business expenses related to your DoorDash activities lower your net profit and tax obligation.

Vehicle expenses are typically the largest deduction, with two methods available: the standard mileage rate or actual expenses. For 2024, the standard mileage rate is 67 cents per mile, covering gas, oil, repairs, depreciation, and insurance, which simplifies record-keeping as you only track business mileage. Alternatively, you can deduct actual expenses by keeping detailed records for all vehicle costs like gas, oil changes, repairs, insurance, and depreciation or lease payments. Regardless of the method chosen, maintaining a mileage log with odometer readings, dates, and trip purposes is essential.

Other common deductible expenses include a portion of your phone and data plan costs for business use. Supplies for deliveries, such as insulated hot bags, blankets, car organizers, and phone mounts, are also deductible. Fees incurred through DoorDash activities, like certain commissions or bank fees for a dedicated business account, can be written off.

A home office deduction might be possible if a specific area of your home is used exclusively and regularly for your DoorDash business, such as managing finances or scheduling. If self-employed and not eligible for employer-sponsored health insurance, you may deduct health insurance premiums. Tolls and parking fees incurred directly while making deliveries are also legitimate business expenses. For all deductions, retain receipts, invoices, and detailed logs as documentation.

Paying Estimated Taxes

As an independent contractor, you pay income and self-employment taxes throughout the year, rather than having them withheld. This “pay-as-you-go” system requires quarterly estimated tax payments to the IRS and potentially your state tax authority. This obligation generally applies if you expect to owe at least $1,000 in tax for the year.

To calculate estimated taxes, project your annual net income (gross DoorDash earnings minus anticipated business deductions). Form 1040-ES, Estimated Tax for Individuals, guides this calculation. Base your estimate on your previous year’s tax return or a realistic projection of your current year’s income and expenses. Account for any other income or deductions.

Estimated tax payments are due on four specific dates:
April 15 (for January 1 to March 31 earnings)
June 15 (for April 1 to May 31 earnings)
September 15 (for June 1 to August 31 earnings)
January 15 of the following year (for September 1 to December 31 earnings)

If a due date falls on a weekend or holiday, the deadline shifts to the next business day.

You can pay online through IRS Direct Pay or the Electronic Federal Tax Payment System (EFTPS). Payments can also be mailed with a Form 1040-ES voucher or made by phone. Failing to pay enough estimated tax can result in an underpayment penalty. Generally, you can avoid this penalty if you owe less than $1,000 when filing, or if your payments meet certain thresholds, such as paying at least 90% of your current year’s tax liability or 100% of your prior year’s tax liability.

Filing Your Annual Return

Filing your annual income tax return synthesizes your income and expense information to determine your final tax liability. Several specific IRS forms are essential for independent contractors.

Form 1040, U.S. Individual Income Tax Return, is your primary tax document summarizing all income, deductions, and credits. Schedule C, Profit or Loss from Business (Sole Proprietorship), is attached to Form 1040. It reports your DoorDash income and deductible business expenses. The net profit or loss from Schedule C flows to your Form 1040, impacting your overall taxable income.

Schedule SE, Self-Employment Tax, calculates the self-employment tax owed based on net earnings reported on Schedule C. You can deduct one-half of your calculated self-employment tax as an adjustment to income on your Form 1040, further reducing taxable income. Your Form 1099-NEC, provided by DoorDash, records your nonemployee compensation and helps report gross earnings on Schedule C.

For filing, you have several options. Many DoorDash drivers use commercial tax software programs for accuracy. Engaging a professional tax preparer is another option. The IRS also offers Free File options for eligible taxpayers. Remember, in addition to federal taxes, you may have state income tax obligations depending on your residence.