Therefore, this is a general overview and not tax advice.
If you are a Dasher – a delivery driver for DoorDash, Uber Eats, Grubhub, or any other on-demand food delivery service – you are classified as an independent contractor, not an employee, which means you are responsible for paying your taxes. You must report your earnings and expenses to the IRS and state tax agencies and pay federal and state income tax, self-employment tax, and other taxes, if applicable.
Your earnings as a Dasher will depend on several factors, such as the number of deliveries you make, the distance you travel, the size of the orders, the tips you receive, and more. Each platform has its own payment structure, fee schedule, and tipping policy, which may affect your take-home pay and your tax obligations.
Generally speaking, as an independent contractor, you will need to pay self-employment tax, which is a combination of Social Security and Medicare taxes that freelancers and small business owners must pay. The current self-employment tax rate is 15.3%, but you can deduct half of it from your taxable income. You may also be able to deduct some of your expenses related to your self-employment, such as gas, car repairs, insurance, phone bills, and other business expenses. However, you will need to keep accurate records and receipts of your expenses.
To determine how much you will owe in taxes as a Dasher, you will need to estimate your annual earnings and tax deductions and use the tax tables or online tax calculators to determine your tax liability. You may also want to consult with a tax professional or use tax preparation software to file your tax return and avoid mistakes or penalties.
The amount of taxes that Dashers pay depends on their earnings, expenses, and tax situation, as well as the tax laws and regulations in their area. Dashers should keep track of their income and expenses, consult with experts if needed, and fulfill their tax obligations to avoid any legal or financial problems.