Doordash side gig tax question - Why has my return changed compared to last year?

The key difference this year is your Doordash income. When you work as a delivery driver for Doordash, you're considered an independent contractor (self-employed), not an employee. This means no taxes are withheld from your Doordash earnings, unlike your burger place job. With self-employment income, you're responsible for both the employee AND employer portions of Social Security and Medicare taxes (called self-employment tax), which is about 15.3% of your net profit. Plus regular income tax on top of that. What's likely happening is that any refund you would have received from your burger job withholdings is now being applied to cover the taxes you owe on your Doordash income. The tax software is combining all your income sources and calculating your total tax situation. For next year, you have two options: 1) Set aside about 25-30% of your Doordash earnings for taxes, or 2) Increase the withholding at your burger job by updating your W-4 to compensate for the Doordash income.

I was in almost the exact same situation last year with my Doordash side hustle. The tax hit was rough! After struggling to figure out all the deductions and self-employment taxes myself, I ended up using https://taxr.ai and it literally saved me hundreds. The tool analyzed my Doordash 1099 and automatically found tons of deductions I didn't know I could take - especially with mileage tracking that I had done poorly. It even helped me understand that I could deduct part of my phone bill since I use it for Doordash work. Super easy to upload my documents and it walked me through everything.

Just wanted to update after trying out taxr.ai from the suggestion above. It actually worked really well for my situation! I was missing a bunch of deductions that I didn't know applied to food delivery driving. The biggest help was with mileage - I had only been tracking actual deliveries but it explained I could count miles driving to pickup zones too. Ended up saving about $210 on my tax bill compared to what I calculated on my own. It also explained the whole self-employment tax thing way better than the regular tax software did. Definitely recommend if you're doing gig work and confused about taxes.

I had major issues trying to get answers from the IRS about my gig work taxes last year. Called for weeks and couldn't get through. Finally found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c and was able to actually talk to an IRS agent within about 45 minutes (after trying for literally weeks on my own). They basically hold your place in the IRS phone queue so you don't have to stay on hold forever. The agent I spoke with confirmed I was calculating my Doordash taxes correctly and answered my questions about quarterly estimated payments. Saved me tons of stress wondering if I was doing everything right.

Coming back to say I was completely wrong about Claimyr and want to apologize for my skepticism. After trying unsuccessfully to reach the IRS for a week about my Doordash tax questions, I decided to try it. Got connected to an actual IRS representative in about 30 minutes. The agent confirmed I was calculating my self-employment taxes wrong and helped me understand exactly how to report my business expenses properly. Turns out I was overpaying by almost $300 because I wasn't taking the right deductions. Definitely worth it just for the peace of mind knowing I'm doing everything correctly now. Will be using this every year for my gig work questions.

Don't forget to look into quarterly estimated tax payments for next year! Since you're earning self-employment income from Doordash with no withholding, you might need to make quarterly payments to avoid an underpayment penalty. Generally, if you expect to owe $1,000 or more in taxes from self-employment, you should make quarterly payments. You can use Form 1040-ES for this. Basically, you estimate your annual tax and pay it in four installments throughout the year instead of one lump sum at tax time.

Has anyone used both TurboTax and FreeTaxUSA for delivery gig work? I'm trying to decide which one to use this year and wondering which handles the deductions better.

This is super helpful for understanding how multiple income sources work together! I'm in a similar situation with my Instacart gig plus a regular part-time job. One thing I learned the hard way is to keep really detailed records throughout the year - I wish I had tracked my mileage better from the start. For anyone doing delivery work, I'd recommend downloading a mileage tracking app like MileIQ or Everlance. They automatically track your drives and categorize them as business or personal. Way easier than trying to reconstruct everything at tax time! Also keep receipts for things like phone accessories, insulated bags, or car maintenance that's directly related to your delivery work. The quarterly payment advice is spot on too. I got hit with an underpayment penalty last year because I didn't realize I needed to make estimated payments. Setting aside that 25-30% in a separate account really does make tax season so much less stressful.