Whether you’re new to DoorDash taxes or have a few tax filings under your belt, H&R Block is here to help Dashers navigate tax time.
First thing – let’s clarify. There isn’t really a category of taxes for DoorDash, but we know that a lot of Dashers refer to their tax responsibilities as “DoorDash taxes,” so we’ve used that term now and again.
One of the most common questions Dashers have is, “Does DoorDash take taxes out of my paycheck?” The answer is no. As an independent contractor, the responsibility to pay your taxes falls on your shoulders. Don’t let that stress you out— over the years H&R Block has helped hundreds of thousands of gig workers like you.
We’re here to help you get through this tax season and answer key questions about tax forms and deductions you can take to lower your tax bill. Plus, we’ll provide resources so you can learn about the other tax tasks you’ll have throughout the year.
DoorDash & 1099s
Each year, tax season kicks off with tax forms that show all the important information from the previous year. You’ll receive a 1099-NEC if you’ve earned at least $600 through dashing in the previous year.
Form 1099-NEC reports income you received directly from DoorDash (ex. incentive payments) and driver referral payments. These items can be reported on Schedule C.
Note: Form 1099-NEC is new. Last year, this information was reported on Form 1099-MISC, box 7.
Wondering if you’ll also get a W-2 tax form from DoorDash? Since Dashers are independent contractors, you will only receive Form 1099, not a W-2.
Working with DoorDash: Tax deductions to know about
As an independent contractor, you’re eligible for special deductions. If you use a personal car for dashing, you can choose one of two methods to claim a deduction on your taxes.
- Standard mileage rate method or
- Actual expense method
Standard mileage deduction rate method
With this method, you deduct a certain amount ($0.575) per mile driven while dashing in 2020 instead of using actual expenses like the ones listed in the next section. However, using the standard mileage method you can generally still deduct the following items separately: tolls and parking fees, auto loan interest, and personal property taxes.
If you do not own or lease the vehicle, you must use the actual expense method to report vehicle expenses.
Actual expense method
With this method, you deduct the actual expenses of operating the car.
These expenses include:
- Lease payments
- Registration fees and licenses
- Gas, oil, and repairs
- Garage rent
- Tolls and parking fees.
If you use your car for both work and personal purposes, you’ll need to distinguish mileage driven for each purpose.
Get more details on deductions:
- Our mileage deduction rules article outlines considerations for both methods mentioned above.
- Check out our independent contractor taxes article for additional deductions.
How to pay DoorDash taxes
You can use H&R Block Premium Online to file your return for the upcoming tax season. Or, if you don’t have any expenses to report, you can use H&R Block Deluxe Online. We’ll walk you through the process for filing your Form 1040 and your Schedule C with the IRS.
If you weren’t aware of your responsibilities to pay taxes through the year, you’ll want to brush up on how to do so. Check out our article on independent contractor taxes. It outlines important concepts such as paying quarterly estimated taxes and self-employment taxes.
Tax FAQ for Dashers
Am I subject to local/city income taxes?
In addition to federal and state income taxes you may be subject to local income taxes. Check with your local government’s website to determine if you are in an area that imposes such a tax.
Are there special city taxes to be aware of?
Certain cities and airports will impose an additional tax on drivers granting them the right to operate in the city. These taxes are generally deductible on Schedule C.
Getting help with taxes when you work with DoorDash
If this all sounds intimidating, take heart. H&R Block is here to make filing for Dashers easier, so you can file confidently.
Ready to file? Take control of your taxes and get every credit and deduction you deserve. Get started with H&R Block Online Premium today.
No expenses to report? Get started with H&R Block Deluxe Online.
Find out more about taxes for independent contractors like you in our Guide to Gig Worker Taxes.
Learn more about expenses for the self-employed with advice from the tax experts at H&R Block.
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