You already know you can deduct mileage and gas—but there are other write-offs many drivers miss. You don’t need a business account—just one that you use only for your delivery work. You use your phone for everything—accepting orders, navigating, and communicating with customers. If your phone is used 80% for work, you can deduct 80% of your phone and data costs.

Step 1: Gather All Your Income Records

Similarly, while health insurance is a crucial expense, it may not fall under business expenses for tax purposes, unless it is a plan specifically for your business. Both terms refer to business expenses you can subtract from your income before calculating how much tax you owe. For example, if you exclusively use the phone for work as a food delivery driver, you can claim 100% of the cost of the phone and your data plan. However, if you use the phone for both personal and business use, you can only claim a portion of the costs.

Which forms do you use to file self-employment taxes?

Every mile you drive, a gallon of gas you buy, or a repair you make to your delivery car can potentially be deducted or written off. The more you deduct, the lower your taxable income—which means you’ll owe less to the IRS (or possibly nothing at all). You’ll usually receive a 1099-NEC form if you make $600 or more with a company. But even if you didn’t hit $600, you’re still responsible for reporting every dollar you earned. That’s the big difference between being self-employed and having a traditional job. Food delivery already had the highest percentage of pay composed of tips compared to other gig work — 53.4% according to recent Gridwise data, compared to just 10.4% for rideshare.

DoorDash Taxes

Staying on top of your taxes is all about building habits that work for you. The more organized you are throughout the year, the easier it is to file accurately, claim the right deductions, and reduce your tax bill. Whether it’s tracking your mileage or setting calendar reminders for quarterly payments, these small steps add up to big savings.

Overall, understanding filing taxes for on-demand food delivery drivers the nuances of tax obligations for food delivery drivers is essential for financial security and compliance. Most food delivery apps DO NOT track how many miles you’re driving when you’re online. To calculate the business use percentage, food delivery drivers can use a variety of methods, such as tracking their business use over a representative period or using a standard rate. For example, if a driver uses their phone 80% for business and 20% for personal purposes, they can deduct 80% of their total phone expenses on their tax return. Additionally, drivers should consult with a tax professional or accountant to ensure that they are in compliance with all tax requirements and regulations.

In 2020, residents in California pushed for legislation that would have required app-based delivery services to count drivers as employees. Track your tax deductions in a spreadsheet (printable spreadsheet) or an app. Keep in mind that you can only deduct the costs of these expenses that are used when you are working. For example, if you use your phone 25 percent of the time for deliveries, you can only deduct 25 percent of your phone and phone plan cost. If you pay for a roadside assistance plan, you can deduct a portion of the cost based on the proportion of miles you drive for deliveries.

Gig delivery drivers are required to pay self-employment taxes if their net earnings exceed $400. Drivers should fill out a Schedule SE, to accompany their personal tax return if they have earned this threshold amount in annual earnings from delivery work. It is paramount to know that self-employment tax is not the entirety of the tax obligation but is rather an additional tax on top of regular income taxes. You will file Schedule C to report your business income and expenses to the IRS. On the Schedule C form, you record all your business income (Grubhub, Postmates, DoorDash, and UberEATS income) and business tax deductions (expenses). You pay taxes on your net income, which is your total income minus any business tax deductions.

Tolls and Parking Fees

You can hire a financial expert to help you sort your tax filing and avail of the tax benefits for your delivery business. As independent contractors, collecting and filing tax information all falls to us. If you drive for multiple gig companies, it can be stressful collecting everything you need at tax time! In this guide, I’ll walk you through what you need to know about filing taxes as a delivery driver. You can also deduct other medical expenses, such as prescription medications, doctor visits, and medical supplies, as long as they are not reimbursed by insurance. If you earn at least $600 outside of delivery transactions, including referral bonuses or quests, you receive Form 1099-NEC.

Usually, for food delivery companies, you will only receive Form 1099-NEC (if you earned more than $600), not Form 1099-K. In the case of UberEATS, if you earn at least $5,000 in delivery transactions (delivery fees and customer tips) in a calendar year, you will receive Form 1099-K. If you deliver food for GrubHub, Postmates, DoorDash, or UberEATS, you are self-employed. As a delivery provider for these companies, you are an independent contractor rather than an employee.

As independent contractors, food delivery drivers are considered self-employed individuals and are required to report their income and expenses on their tax returns. This means that they are responsible for paying self-employment taxes, which include both the employee and employer portions of payroll taxes. Additionally, food delivery drivers may be able to deduct business expenses related to their work, such as mileage, fuel, and maintenance costs, which can help reduce their taxable income. The best tip for tax filing includes all the delivery business expenses, like vehicle mileage, fuel cost, equipment cost, salaries, and other important elements to minimize your taxable amount.

Track tax deductions (business expenses)

On this form, drivers will report their total income from food delivery work, as well as any business expenses they incurred during the year. This can include expenses such as mileage, fuel, maintenance, and insurance costs, as well as any other expenses related to their business. Drivers will also need to calculate their net profit or loss from their business, which will be reported on their personal tax return (Form 1040). If you are using your vehicle for delivering items, you might be able to deduct the costs of its use. There are two ways to deduct vehicle costs—using the mileage method or actual expenses method.

Not only that, but numbers have never scared me; until I started working for myself. The following TurboTax Online offers may be available for tax year 2024. Intuit reserves the right to modify or terminate any offer at any time for any reason in its sole discretion. Unless otherwise stated, each offer is not available in combination with any other TurboTax offers. Certain discount offers may not be valid for mobile in-app purchases and may be available only for a limited period of time. For example, suppose you use your phone 30% for delivery food and 70% for personal use.

Given that food delivery drivers often drive all over town making deliveries, it’s no surprise that mileage is one of the most valuable tax deductions. Self-employment taxes, which encompass Social Security and Medicare, are a significant tax consideration for gig delivery drivers. To compute these, drivers must fill out Schedule SE, which calculates the tax based on net earnings from self-employment. This form ensures that those who work independently are contributing to their Social Security and Medicare similar to traditional employees. To ensure compliance and ease during tax time, employ a dedicated mileage tracker app or a simple, well-maintained mileage log. The former typically automates the process, distinguishing between personal and business mileage and providing easily generated reports.

• You don’t need a business account—just one that you use only for your delivery work.
• We’ll search over 500 deductions and credits so you don’t miss a thing.Get started now by logging into TurboTax and file with confidence.
• Yes, food delivery drivers can deduct expenses related to their phone and other equipment used for work.

Security Certification of the TurboTax Online application has been performed by C-Level Security.

One option is to visit GetYourRefund.org for free virtual tax preparation. Depending on your income and needs, GetYourRefund will direct you to full-service virtual tax filing, do-it-yourself free tax preparation, or free in-person services. Working for a food delivery service is about more than just delivering food.

Catering Manager: Key Metrics to Track for Success

Don’t forget, if you’ve opted for a roadside assistance plan for those just-in-case scenarios, this too can be deductible. Gig delivery companies will report to the IRS the gross (total) income or revenue paid to you. The IRS will expect you to pay taxes on that amount, unless you track and document expenses you’re allowed to deduct and are considered reasonable for operating your business.

• For example, if a driver uses their phone 80% for business and 20% for personal purposes, they can deduct 80% of their total phone expenses on their tax return.
• This method allows you to deduct a set amount for each mile driven for business purposes.
• There are two ways to deduct vehicle costs—using the mileage method or actual expenses method.
• Keep in mind that you had to select your preference before January 22, 2021.

Always keep digital or paper records of your tolls and parking receipts in case you need to verify them later. Check out this helpful step-by-step guide to becoming a DoorDash driver so you know what to expect and how to get started the right way. If you are unsure whether you are an employee or a third party, talk to your employer. As we head into peak catering seasons, now is the time to review your delivery and tipping setup. Remember, some delivery providers may reject or deprioritize orders with insufficient tips or unclear tipping structures.

Your technology stack needs to navigate these complexities automatically. For restaurants, especially those with substantial catering operations, this isn’t just a policy footnote. You will likely receive Form 1099-NEC from Grubhub, Postmates, and DoorDash if you earn more than $600 during the calendar year. State tax laws can vary widely, so it’s important to familiarize yourself with the specific regulations in the state where you work.

If you did not, DoorDash should have emailed you, as well as sent a physical copy in the mail to the information on file. Before we start looking at the different companies and how to get your tax documents from each of them, there are a few things to consider. If you’re not sure whether you’re an employee or a contract worker, talk to your employer.