Doordash does report any income earned by employees or drivers to the IRS. You might receive a Form 1099-NEC from Doordash, which indicates that Doordash reported your income to the IRS.
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Independent contractors like dashers are also on the hook for both federal and state income taxes. The exact percentages vary depending on your income level, state, and tax bracket. If you have a W-2 job as well, your combined W-2 and DoorDash earnings will be used to figure out your tax bracket.
Using Schedule C. You will most likely report the income from your 1099s on Schedule C, Profit or Loss from Business. Since Uber reports this income information directly to the IRS, you don't have to include the actual 1099 forms with your tax return. Schedule C can also be used to list your business-related expenses.
DoorDash drivers can write off expenses such as gasoline only if they take actual expenses as a deduction. Federal mileage reimbursement of 56 cents per mile includes the cost of gas as well as maintenance and other transportation costs. An independent contractor can't deduct mileage and gasoline at the same time.
Report your business mileage deduction on Form 1040 Schedule C, applying the standard mileage rate or your actual vehicle expenses. Enter qualifying business expenses on Schedule C as well, categorizing each appropriately. Use Form 4562 to calculate depreciation deductions on assets like your car or phone.
For July 1, 2022, to December 31, 2022, the standard mileage rates are as follows: Business use of auto : Our DoorDash clients may find this particularly beneficial. 62.5 cents per mile (up from 58.5 cents for January 1, 2022, to June 30, 2022) may be deducted if an auto is used for business purposes.
The IRS often audits Uber drivers, just as they audit other small businesses. If you work full time and lose money, what are you living on? Why do you do it? The obvious suspicion is that you are under reporting income or overstating expenses.