Tax Planning

DoorDash (1099) Taxes: A Guide To Filing Taxes And Maximizing Deductions

by
TaxBuzz Staff
on
12/20/2021
DoorDash (1099) Taxes: A Guide To Filing Taxes And Maximizing Deductions

Taking care of the taxes is for sure extremely important. Most of you know that famous saying by Benjamin Franklin "Nothing can be said to be certain except death and taxes" and that's completely true.

Now, if you’re reading this article, it probably means that you’re searching for some detailed information regarding DoorDash (1099) taxes. When you’re a self-employed delivery driver, it comes with certain advantages.

You are your own boss and no one is looking over your shoulder, plus this type of job can definitely bring a substantial amount of money, however, dealing with taxes can be a bit challenging. But don’t worry, that’s why this article is here to tell you everything there is to know about filing your taxes.

Comprehensive Guide To DoorDash (1099) Driver Taxes

Gather And Fill Out All Important Tax Forms 

When it comes to this, you'll have to arm yourself with patience, since there will be lots of forms you will need to file your taxes. Let’s learn more about them. If you want to properly file taxes, you will need to fill in these forms. They include:

  • Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Tax Return for Seniors
  • Schedule SE (Form 1040), Self-Employment Tax
  • Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship) 

Furthermore, you will have to report your salary by utilizing the classic tax return, Form 1040. You will have to employ Schedule C to enumerate all your earnings and expenses (and costs=write-offs!).

Just bear in mind that there may be additional local and state tax forms that you will have to fill out as well. In order to see whether it is necessary or not, contact a professional or tax service. Expect to receive information regarding your income from DoorDash. This usually comes in the form of:

  • A 1099-NEC – you will get this from DoorDash, if you earned more than $600 from it.

At times, you may receive this form with some details that are not correct. Luckily, that’s something that can easily be fixed. All you have to do is to log into your account and highlight these errors and quickly (within a day), you will receive a brand-new form.

Remember, the amount of money you’ve earned that can be seen on this form doesn’t always reflect the full income history you can typically see on the Stripe Express account. Why is that happening?

Well, it’s because if you own a DasherDirect debit card, Stripe Express will not showcase the money you receive direct deposited into your account. Furthermore, 1099 will contain DasherDirect income though.

Write-Offs And Deduction

Now that you know the basics, you can proceed with other information. Those who are interested in gathering as much useful information regarding DoorDash 1099 taxes would probably also want to know more about getting the lowest possible tax bill by simply writing off business costs. It doesn’t really matter whether this is your full-time job or not, it’s of huge importance to pay attention to the write-off.

Many in the DoorDash delivery service do this with personal accounts and separate businesses. Namely, they utilize one card particularly for their personal needs, and the other one for anything they spend their money on while they are working.

This is a great strategy, however, to a majority of dashers, it may not be the best possible option. Why is that? Well, it's because a lot of them utilize some of the same purchases for both personal and business needs, such as their car or cell phone.

Now, if by any chance you do not own a separate business car, you can simplify bookkeeping by employing an expense tracker. These tools can be of huge help because they instantly scan all your transactions related to business expenses and help you annul them even if they are mixed with personal purchases.

Speaking of write-offs, those that are car-related will be discussed now. It is highly likely that you are spending a bunch of cash on your car. If that's the case, then you can deduct these expenses by utilizing either the classic expense method or the standard mileage rate:

  1. Gas
  2. Maintenance
  3. Inspections
  4. Repairs
  5. Car insurance
  6. Auto loan interest
  7. Vehicle depreciation 
  8. Parking fees
  9. Registration
  10. Tolls

Car-related costs will probably make up a solid chunk of your write-offs you can take, however, they are not the only business-related expenses you should be focusing on. The most common ones include:

  • Insulating bags
  • Cell phone and phone accessories 
  • Applications utilized for bookkeeping and mileage tracking
  • DoorDash commission fees

What Else Do You Need To Know?

Deduction Of Business Expenses 

Bear in mind that if by any chance you are also employing some of these purchases in your personal life, they are going to be partially tax-deductible. This refers to things like your car or mobile phone.

Moreover, you can only deduct the portion of these costs you utilize for your job as a driver. For instance, if you are using your vehicle forty percent of the time for your job, and sixty percent for any personal needs, you will only be allowed to deduct those forty percent of your car expenses.

What About Quarterly Taxes?

Since you're self-employed, you might be responsible for quarterly taxes, especially if this is your only source of income. Just make sure to pay these estimated taxes on time. Below we will list the due dates for this year:

1st Quarter

  • Payment period: January 1 – March 31
  • Tax payment due April 15, 2021

2nd Quarter 

  • Payment period: April 1 – May 31
  • Tax payment due June 15, 2021

3rd Quarter 

  • Payment period: June 1 – August 31
  • Tax payment due September 15, 2021

4th Quarter

  • Payment period: September 1 – December 31
  • Tax payment due January 15, 2022

As you can see, it doesn't really matter whether this job is something you do full-time or is a side hustle, you still have to keep track of how much money you're supposed to give for taxes. We hope that this guide has made things a bit clearer.

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TaxBuzz Staff

TaxBuzz Staff

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