For instance, if you purchase a phone mount so you can get hands-free driving directions while making deliveries, you can deduct the cost of that, too. Phone accessories may also be deductible. You can deduct the cost of a new phone as well as the cost of your cell service. As a result, you can deduct some of your cell phone expenses. Phone Serviceīecause work comes to you through the DoorDash app on your cell phone, you must have a phone in order to do the work. If you drive your car for personal tasks 80 percent of the time and for work 20 percent of the time, you can only deduct 20% of your car expenses.
You can only deduct the portion of these expenses that applied to your work. Car insurance, gas, repair bills, inspection fees, tolls and parking fees are all deductible expenses, but there’s a catch. To do so, you’ll need to add up everything you paid for your car during the year. If, for example, your car was in the shop more than normal during the year, it may benefit you to calculate your actual car expenses rather than taking the standard mileage rate. This number is easy to calculate, but it may not cover your actual expenses. The easiest is to simply multiply the number of miles you drove by the current IRS standard mileage rate. There a two ways to tackle this deduction. Work miles are any that you drove specifically for work – whether you’re picking up food, making deliveries or going to the store to pick up a new insulated bag for keeping food hot. To do so, you’ll need to keep track of how many miles you drive for work. You still drive your car for personal reasons as well as for work, so you can only deduct the expenses related to the job. Notice the very important word “some” in that sentence. The counts as company use of your personal vehicle, and you can deduct some of your car expenses as a result. When driving for DoorDash you must, of course, use your own car. As a DoorDash driver, however, some are especially helpful and that you absolutely don’t want to miss. There are many available deductions for the self employed, and you can take as many as apply to you. The rules for doing so will vary from one location to another.ĭiscover Tax Write-Offs You’ve Been Missing It’s important to remember that you may also have to pay state and local income taxes depending on where you live. This is what people refer to when they talk about self employment tax. When you’re self-employed, however, you must pay both halves. Typically, you and your employer each pay half of this FICA tax. You’ll also need to pay FICA tax, which includes Social Security and Medicare taxes. The first is your standard federal income tax. There are several taxes that you’ll be responsible for as a DoorDasher. No taxes are taken out of your DoorDash paycheck. Instead, you must pay them yourself at tax time or, if you make enough, by making estimated tax payments throughout the year. As such, DoorDash doesn’t withhold the taxes for you. Independent contractors still owe these taxes, but are considered self-employed.
When you work as an employee, your job withholds income taxes from your paycheck and submits them to the appropriate taxing authorities for you.
It’s important to understand these tax issues so you don’t accidentally run afoul of the IRS. Either way, it’s important to understand that although working as an independent contractor for DoorDash and other companies offers some tremendous benefits, it also comes with tax consequences. If self-employment is for you, you can also plunge headfirst into the gig economy and become a full-time delivery driver. Discover Tax Write-Offs You’ve Been MissingĪ side hustle like DoorDash can be a terrific way to make some extra cash.
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