Food delivery, DoorDash or Postmates. ?
Hello. I’m wondering how this works with income tax. Someone told me to keep track of my mileage but which one? The mileage once I’m leaving my house till I get back home or once I’ve picked up the food and took it to them? Also, I need to pay my own taxes, someone said I need to pay it 4 times a year?
- NALv 74 weeks agoFavorite Answer
You need your mileage from when you left home.
The 4x a year refers to quarterly estimated tax payments. Think of it like federal income tax withholding on a paycheck, but you personally write the check.
- MarkLv 63 weeks ago
I've delivered for DD. I just took a mileage deduction. You can take other vehicle deductions, but then you need to pro-rate it against personal use of the vehicle. It was simpler to just take the mileage. You could also deduct the cost of your phone, but again would have to pro-rate it
I use Stride to track mileage. It's free, easy to use and doesn't take up a lot of data.
You need to file a Schedule C. You also need to pay estimated taxes quarterly, both Federal and State (if applicable). I didn't make a lot, so my other tax deductions covered it.
It's a good side job, but I wouldn't recommend it as a primary income source. I also have the advantage of having an old paid off car, so wear and tear isn't an issue; I'm basically using it to make money. I've actually had nights where the mileage deduction equaled my pay.
Here are some IRS resources:
- STEVEN FLv 74 weeks ago
Keep mileage logs showing the beginning and ending mileage and purpose of the trip EVERY TIME you start the car. A good tax perparer can get what they need from that record. It i easy to not log enough, but impossible to log too much.
- Max HooplaLv 74 weeks ago
If you have fallen into the trap of working for DoorDash you are not likely to make enough money to owe any income tax but you will owe self-employment tax which is Social Security and Medicare tax for self-employed people. You will have to pay both halves instead of just the employee portion that you would owe if you worked for wages. This is 15.2% fo 92.35% of your profit (gross pay minus expenses which will consist mostly of vehicle costs.) Roughly speaking this will be about 14% of whatever profit you have. If you are like most of the people like you that I have seen, this will be about the same as working for minimum wage.
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- CarVolunteerLv 64 weeks ago
If you were employed by a company and used your car on the job, you couldn't count the commute miles to your office and back home. The same applies if you are a contractor. On the other hand, when I did consulting work, I worked at home. It was main place of "business". Get professional help for your first year.
- JudyLv 74 weeks ago
You pay i/4 of your tax 4 times a year.