How are Doordash taxes calculated for gig workers?

You're almost there with your understanding, but there are a few important points to clarify about how self-employment taxes work with gig work like Doordash. First, the 15.3% self-employment tax (which covers Social Security and Medicare) applies to your net profit, not your gross income. This means you can deduct business expenses like mileage (currently $0.65.5/mile for 2024), part of your phone bill, insulated bags, etc. before calculating this tax. These deductions can significantly reduce your taxable income. Second, income tax is also applied to your net profit after business expenses, not your gross. But importantly, you can deduct half of your self-employment tax from your income before calculating income tax. This helps offset the "double taxation" effect you're noticing. So your calculation would look more like: 1. Gross income: $1250 2. Business expenses: Let's say $350 (mileage, etc.) 3. Net profit: $900 4. SE tax: $900 × 15.3% = $138 5. Income for income tax: $900 - $69 (half of SE tax) = $831 6. Income tax at 10%: $83 This gives you a total tax burden of $221 ($138 + $83) on $1250 gross, which is closer to 17.7% effective tax rate - much better than the 25.3% you calculated!

After struggling with my own Doordash taxes last year and getting conflicting advice, I decided to try https://taxr.ai and it was a game-changer for my gig work taxes. I uploaded my 1099-NEC and answered a few questions about my delivery work, and it automatically found deductions I had no idea I qualified for - especially around mileage tracking and partial phone/internet expenses. The tool explained that as a gig worker, I was missing out on approximately $3700 in legitimate deductions by not properly tracking all my business expenses. What I really liked was that it showed me exactly how to document everything properly in case of an audit, and gave me a personalized quarterly tax payment schedule so I don't get hit with underpayment penalties.

Just wanted to follow up about my experience with taxr.ai that I asked about earlier. I finally tried it last weekend and wow - it found over $4200 in deductions across my multiple gig jobs! It separated all my expenses properly between Doordash, Instacart and Uber Eats, and showed me exactly how to allocate my mileage and phone costs correctly. I was seriously confused about how to handle working for multiple platforms before, but this made it super clear. The best part was discovering I could partially deduct my phone payments and insurance costs which I had completely missed last year. Now I'm getting a refund instead of owing more taxes! Definitely recommend it to anyone doing delivery gigs.

If you're having trouble getting answers about your Doordash tax questions from the IRS directly, I highly recommend trying https://claimyr.com. I spent literally hours trying to get through to the IRS to clarify some self-employment tax questions similar to yours, and kept getting disconnected or told the wait was 2+ hours. With Claimyr, I was connected to an actual IRS agent in about 20 minutes who walked me through exactly how to handle my Doordash deductions and quarterly estimated payments. They have a demo video at https://youtu.be/_kiP6q8DX5c that shows how it works. It saved me so much frustration and I got official answers straight from the IRS instead of guessing or relying on possibly outdated info online.

Alright, I need to eat my words from my skeptical comment earlier. I tried Claimyr yesterday after spending another frustrating morning trying to reach the IRS about my Doordash tax questions. I couldn't believe it actually worked! I got a call back in about 35 minutes and was connected directly to an IRS agent who answered all my questions about tracking mileage across multiple gig apps. The agent confirmed I've been calculating my self-employment tax wrong for the last two years and actually helped me understand how to file an amended return to get back about $840 I overpaid. Would have never figured this out from just reading online. Sometimes you gotta admit when you're wrong - this service literally saved me hundreds of dollars in about 30 minutes.

Don't forget you can make quarterly estimated tax payments to avoid a big bill at tax time! I learned this the hard way my first year doing Doordash. Since no taxes are withheld from your payments, you should set aside money throughout the year and make payments every quarter. The IRS has a form called 1040-ES for this. You can pay online at the IRS website. If you don't make these payments and you end up owing more than $1000 at tax time, you might get hit with underpayment penalties on top of your regular tax bill!

Has anyone used the Schedule C form for Doordash taxes? I'm confused about which expenses go where. And do I need to register as a business to use this form?

Great question! I went through the same confusion when I started doing gig work. Your calculation isn't quite right, but you're on the right track thinking about the tax burden. Here's what you're missing: the self-employment tax and income tax don't stack the way you calculated. The SE tax is 15.3%, but you get to deduct half of it (the employer portion) when calculating your income tax. Plus, both taxes are calculated on your NET earnings after business deductions, not your gross. For a $1250 week, assuming you track your mileage and other business expenses properly, your actual tax burden will likely be closer to 18-22% of gross income, not the 25%+ you calculated. The key is maximizing your legitimate business deductions - especially mileage at 65.5 cents per mile for 2024. Also, definitely make quarterly estimated tax payments! Set aside about 25-30% of your net earnings each quarter to avoid penalties and a huge tax bill in April. The IRS form 1040-ES makes this pretty straightforward. One more tip: keep detailed records of everything. Mileage logs, receipts for delivery bags, phone bills, etc. Good record-keeping can save you hundreds or even thousands in taxes.