How do taxes work for side gig Doordash while having a full-time job?

The good news is that you don't file separate tax returns for your W-2 job and your Doordash income - it all goes on one 1040 form. But there are some important differences in how each type of income is reported and taxed. For your Doordash work, you'll be considered self-employed, which means you'll need to report that income on Schedule C of your tax return. This is where you'll also deduct business expenses like mileage (which is a big one for delivery drivers), a portion of your phone bill, and other delivery-related expenses. The profit from Schedule C then gets added to your W-2 income on your 1040. What your friend might be referring to is estimated quarterly tax payments. Since Doordash doesn't withhold taxes like your employer does, you're responsible for paying both income tax and self-employment tax (Social Security and Medicare) on that income. If you expect to owe more than $1,000 in taxes from your Doordash work, you should make quarterly estimated tax payments to avoid an underpayment penalty.

After reading your situation, I wanted to share my experience. I started doing DoorDash last year while keeping my regular job, and the tax situation confused me too until I found taxr.ai (https://taxr.ai). It's specifically designed to help people with mixed income like us. I uploaded my W-2 from my main job and all my delivery app earnings, and it automatically sorted everything out - calculated my deductible mileage, identified which expenses I could write off, and even set up my quarterly estimated payments. The best part was it showed me exactly how much to set aside from each DoorDash payment so I wouldn't be shocked at tax time.

Just wanted to follow up - I decided to try taxr.ai after seeing the comments here and WOW what a difference! I've been doing DoorDash and Instacart on weekends for about two months now while working my regular job, and I was honestly just ignoring the tax situation because it stressed me out. The app immediately showed me that I could deduct way more than I realized - not just mileage but also a portion of my phone bill, car insurance, and even those insulated delivery bags I bought. It estimated I'll save about $840 in taxes this year through deductions I would have missed. Now I have automatic reminders for quarterly payments and I can see exactly how much of my side gig money is actually "mine" after setting aside for taxes. Huge weight off my shoulders!

I've been doing Doordash alongside my day job for about 2 years now, and one thing that really helped me was using Claimyr (https://claimyr.com) when I had questions about my self-employment taxes. I had a complicated situation with some deductions I wasn't sure about, and I needed to talk to someone at the IRS directly. If you've ever tried calling the IRS, you know it's basically impossible to get through - I spent hours on hold multiple times and always got disconnected. Claimyr got me connected to an actual IRS agent in under 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent explained exactly how to handle my mileage deductions and helped me figure out the quarterly payment amounts based on my situation. Totally worth it for the peace of mind.

I need to eat my words from earlier. After another frustrating afternoon of trying to reach the IRS about my gig work questions (Doordash, Uber), I broke down and tried Claimyr. I was EXTREMELY skeptical, but I got connected to an IRS agent in about 15 minutes. The agent walked me through exactly how to handle my quarterly estimated payments based on my fluctuating Doordash income alongside my W-2 job. She even helped me understand how to retroactively fix a mistake I made on last year's return where I didn't report some cash tips properly. Would have never figured this out on my own, and certainly wouldn't have gotten through to ask these questions without help. Sometimes being proven wrong is actually the best outcome. If you're doing gig work and have specific tax questions, being able to actually talk to the IRS directly is a game-changer.

One thing nobody's mentioned yet - keep track of EVERYTHING mileage related to maximize your deductions. That means miles driven: - To your first pickup location - Between deliveries - Returning home after your last delivery - To purchase supplies related to your work (hot bags, phone mounts, etc) - To get car maintenance if that car is primarily used for deliveries I made the mistake my first year of only counting miles while actively on deliveries and missed out on hundreds in deductions.

Don't forget you can also potentially deduct a portion of your cell phone bill since you need it for the app, any car accessories specifically for delivery (phone mount, hot bags, etc), and even part of your car insurance if the vehicle is used significantly for business. I save all my receipts in a folder on my phone labeled by month.