As a DoorDash driver, you’re considered an independent contractor, meaning taxes aren’t automatically withheld from your earnings. While this gives you flexibility, it also means you must report your income, pay self-employment taxes, and claim deductions to minimize your tax bill.
Understanding DoorDash taxes is essential to avoid IRS penalties and maximize deductions that reduce your overall tax liability. This guide covers how to file DoorDash taxes, track income, and deduct expenses to keep more of your hard-earned money.
How DoorDash Drivers Are Taxed
As a self-employed worker, your earnings from DoorDash are subject to:
✔ Federal and state income taxes (based on tax brackets).
✔ Self-employment tax (15.3% for Social Security and Medicare).
✔ Quarterly estimated tax payments if you expect to owe over $1,000.
DoorDash does not withhold taxes from your pay, so you are responsible for calculating and paying your tax obligations throughout the year.
Will You Get a 1099 for DoorDash Taxes?
DoorDash provides tax forms based on your earnings:
✔ Form 1099-NEC – If you earn $600 or more, DoorDash will send you a 1099-NEC.
✔ No 1099? You Still Owe Taxes – Even if you don’t receive a 1099, you must report all earnings on your tax return.
You can find your 1099 form on the DoorDash app or through Stripe Express if your earnings qualify.
How to Track Income and Expenses as a DoorDash Driver
Accurate income and expense tracking ensures you claim all possible deductions and avoid IRS issues.
Best Practices for Record-Keeping:
✔ Use a mileage-tracking app (Stride, Everlance, or MileIQ).
✔ Save all receipts for gas, car maintenance, and work-related expenses.
✔ Download bank statements for transaction records.
✔ Use accounting software (QuickBooks, FreshBooks) to track earnings.
Good record-keeping prevents overpaying taxes and helps maximize deductions.
Check out our blog on Filing Uber Eats Taxes for more information!
Essential DoorDash Tax Deductions to Reduce Your Tax Bill
As an independent contractor, you can deduct business-related expenses to lower taxable income.
1. Mileage Deduction
- The standard mileage rate for 2024 is 67 cents per mile.
- Alternatively, you can deduct actual expenses (gas, repairs, depreciation).
- Keep detailed logs of all business miles driven.
2. Vehicle Expenses
- Gas, oil changes, and maintenance.
- Insurance and registration fees.
- Car washes and detailing (if required for work).
3. Phone and Internet Bill
- A portion of your cell phone bill and data plan is deductible.
- If you use Wi-Fi at home for work, you can deduct part of the cost.
4. Hot Bags, Insulated Delivery Gear, and Work Supplies
- DoorDash bags, uniforms, or gear are deductible.
- Tolls and parking fees for work-related trips.
5. Health Insurance Deduction
- If you pay for health insurance as a self-employed worker, premiums may be deductible.
6. Self-Employment Tax Deduction
- The IRS allows you to deduct half of your self-employment tax from taxable income.
Maximizing deductions significantly lowers your taxable income and reduces the amount you owe.
Paying Estimated Taxes as a DoorDash Driver
Since DoorDash doesn’t withhold taxes, drivers earning more than $1,000 annually must pay quarterly estimated taxes to avoid IRS penalties.
Estimated Tax Payment Deadlines:
✔ April 15 (for January – March income).
✔ June 15 (for April – May income).
✔ September 15 (for June – August income).
✔ January 15 (next year) (for September – December income).
Failing to pay quarterly taxes can result in penalties and interest charges from the IRS.
Self-Employment Tax and How to Reduce It
Self-employment tax covers Social Security (12.4%) and Medicare (2.9%).
✔ Total self-employment tax rate: 15.3% of net earnings.
✔ Half of the self-employment tax is deductible, reducing taxable income.
Ways to Lower Self-Employment Tax:
✔ Deduct mileage, car expenses, and work-related costs.
✔ Contribute to a self-employed retirement plan.
✔ Use the Qualified Business Income Deduction (QBI).
Reducing self-employment tax helps increase your take-home earnings.
What Happens If You Don’t Report DoorDash Income?
Failing to report DoorDash income can lead to:
❌ IRS penalties and interest charges.
❌ Potential tax audits if your income is underreported.
❌ Loss of deductions that could lower your tax bill.
Since the IRS receives a copy of your 1099-NEC, underreporting income raises red flags and could lead to tax consequences.
State and Local Tax Considerations for DoorDash Drivers
In addition to federal taxes, DoorDash earnings may be subject to state and local taxes.
✔ State Income Tax – Some states tax self-employment earnings, while others have no income tax (e.g., Texas, Florida).
✔ City or Local Taxes – Certain cities require business licenses or local tax filings.
✔ Sales Tax Exemptions – Most food delivery services don’t collect sales tax, but some states have special rules.
Understanding state and local tax laws ensures full compliance and proper tax filing.
Handling Multiple Income Sources as a DoorDash Driver
Many DoorDash drivers also work for other gig economy platforms like Uber Eats, Instacart, Grubhub, or Lyft. Managing taxes for multiple income streams requires proper organization to avoid IRS penalties and optimize deductions.
How to Track and Report Multiple Income Sources:
✔ Separate Business and Personal Expenses – Use a dedicated bank account for gig earnings and expenses.
✔ Consolidate 1099 Forms – Each platform issues a 1099-NEC if you earn over $600.
✔ Adjust Estimated Tax Payments – If you drive for multiple platforms, you may owe more in quarterly estimated taxes.
✔ Combine Deductions Across Platforms – Mileage, phone, and insurance expenses apply to all gig work, not just DoorDash.
If you have multiple income sources, working with a tax professional ensures accurate reporting and prevents overpayment of taxes.
How to File DoorDash Taxes If You Earn Less Than $600
Even if you don’t receive a 1099 from DoorDash, you must still report your earnings to the IRS.
What to Do If You Don’t Get a 1099-NEC:
✔ Check Stripe Express – DoorDash processes payments through Stripe, and earnings records are available in the app.
✔ Review Bank Deposits – Track deposits from DoorDash in your personal or business bank account.
✔ Keep Self-Employment Tax in Mind – Even if you earn less than $600, self-employment tax may still apply.
Failing to report small amounts of income could result in IRS penalties or future tax audits.
What If You Owe Back Taxes from Previous DoorDash Earnings?
If you failed to file or underpaid taxes in past years, you may owe back taxes, penalties, or interest.
How to Handle Back Taxes from DoorDash Earnings:
✔ File Missing Tax Returns – Even if you missed past tax filings, the IRS allows you to file retroactively.
✔ Set Up a Payment Plan – The IRS offers installment agreements if you can’t pay in full.
✔ Request Penalty Abatement – First-time offenders may be able to reduce or remove penalties.
✔ Amend Incorrect Returns – If you misreported deductions or earnings, you may need to file an amended return.
At Dimov Tax, we help gig workers resolve back taxes and avoid further IRS penalties.
Common Tax Mistakes Made by DoorDash Drivers
DoorDash drivers often make critical tax mistakes that result in higher tax bills or IRS issues.
Avoid These Common Mistakes:
❌ Not tracking mileage correctly – Missing mileage logs can cost drivers thousands in deductions.
❌ Forgetting to pay quarterly taxes – Late estimated tax payments can lead to penalties and interest charges.
❌ Overlooking deductible expenses – Small costs like phone bills and parking fees add up to major savings.
❌ Mixing personal and business finances – Not separating expenses can create IRS scrutiny.
Using proper record-keeping methods ensures lower tax liability and a smooth filing process.
DoorDash Taxes and Retirement Savings
As a self-employed worker, DoorDash drivers don’t have an employer-sponsored retirement plan, but they can still take advantage of tax-advantaged savings options.
Best Retirement Plans for DoorDash Drivers:
✔ Traditional or Roth IRA – Contribute up to $7,000 per year tax-free or tax-deferred (limits may vary based on income).
✔ Solo 401(k) – Allows higher contribution limits for those earning substantial gig income.
✔ SEP IRA – Best for drivers who also own a business or work multiple jobs.
Contributing to a retirement plan lowers taxable income and secures long-term financial stability.
Tax Benefits of Using an LLC for DoorDash Earnings
If you earn significant income through DoorDash, forming an LLC could provide tax benefits and liability protection.
Pros of an LLC for DoorDash Drivers:
✔ Limited Personal Liability – Protects personal assets in case of legal issues.
✔ Tax Flexibility – Choose between pass-through taxation or S-Corp status to lower tax rates.
✔ Increased Credibility – Some banks and lenders prefer working with registered businesses.
An LLC isn’t necessary for all drivers, but for those earning full-time gig income, it may be worth considering.
How Dimov Tax Helps DoorDash Drivers with Tax Filing
At Dimov Tax, we specialize in helping gig workers, freelancers, and independent contractors with their tax needs.
Our Tax Services Include:
✔ Maximizing deductions to reduce tax liability.
✔ Filing self-employment and estimated taxes.
✔ IRS audit defense and tax resolution.
✔ State and local tax compliance for DoorDash drivers.
We help delivery drivers save money on taxes and avoid IRS penalties.
DoorDash Taxes: Maximize Your Deductions and Stay IRS-Compliant
As a self-employed DoorDash driver, tax planning is essential for reducing your tax burden and maximizing savings. By tracking income, claiming deductions, and paying estimated taxes on time, you can avoid penalties and keep more of your earnings.
For expert DoorDash tax assistance, contact Dimov Tax today.