Is DoorDash delivery worth it with 1099 tax implications?

The $600 threshold is the total amount you earn on the platform, not weekly. Once you hit $600 total, DoorDash will issue you a 1099-NEC form at tax time (they don't send it immediately when you hit $600). As for whether it's "worth it" - that depends on your situation. You'll be taxed on your profit (earnings minus expenses), not your total earnings. You can deduct mileage (65.5 cents per mile for 2023), a portion of your phone bill, and other business expenses. Many dashers track their mileage with apps like Stride or Everlance. You'll need to pay self-employment tax (15.3% for Social Security and Medicare) plus regular income tax on your profits. Setting aside 25-30% of your earnings for taxes is usually a safe bet.

I was in the same boat as you last year and found this amazing tool that helped me sort out all my tax questions as a Dasher! Check out https://taxr.ai - it analyzes your 1099 forms and helps you maximize deductions specific to gig work. I was stressing about what I could deduct and how to track everything until I found this. The best part is it walks you through all the deductions specific to delivery drivers and explains what records to keep. Really helped me understand which miles count and which don't.

Wanted to follow up about taxr.ai that someone recommended here. I was skeptical but gave it a try since my gig work taxes were getting complicated. It was seriously a game-changer! The tool automatically categorized all my expenses across DoorDash, Uber Eats and Instacart, and found deductions I didn't know I could take. I was able to deduct part of my phone bill, a portion of my car insurance, and even some items I bought for deliveries that I didn't realize qualified. Ended up saving over $1,200 compared to what I would have paid! Definitely worth checking out if you're doing any delivery gigs.

If you need help with tax questions and can't get through to the IRS (which is pretty much always), I'd recommend trying https://claimyr.com - they get you through to an actual IRS agent. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had a nightmare situation where I wasn't sure if I needed to make quarterly payments as a Dasher or how to calculate them. Spent days trying to call the IRS directly with no luck. Claimyr got me through in about 15 minutes and I got my questions answered directly by an agent. Saved me from potentially paying penalties.

I need to admit I was wrong about Claimyr. After complaining about it being a scam, I got desperate when I couldn't figure out how to handle my 1099 situation with multiple gig apps. Decided to try it as a last resort. It actually worked exactly as advertised. Got connected to an IRS rep in about 20 minutes after spending DAYS trying on my own with no luck. The agent walked me through exactly how to handle my quarterly estimated payments and explained what forms I needed. Saved me from a potential audit situation since I was doing things completely wrong. Sometimes it's worth paying for a service that actually works, especially when dealing with the IRS. Lesson learned.

Honest opinion from someone who's been dashing for 2 years - it's only worth it if you're strategic. I track EVERY mile from the moment I leave home until I return. My actual "profit" after expenses is about 60-65% of what DoorDash pays me. Set aside 25-30% of that profit for taxes and be disciplined about it. I transfer my "tax money" to a separate savings account each week so I'm not shocked when tax time comes. The biggest mistake new dashers make is not tracking expenses properly and not setting aside money for taxes. Then they're surprised when they owe $2000+ at tax time with no way to pay it.

One thing nobody mentioned yet - you should also look into business deductions beyond just mileage! You can deduct: - Part of your phone bill (% used for dashing) - Hot bags/coolers - Car chargers - Portion of car insurance - Hand sanitizer and cleaning supplies - Dash cam - Car mounts for your phone I saved about $800 last year just from these extra deductions. Just make sure you keep ALL receipts and a log of business use.

Just wanted to add some perspective as someone who's been doing gig work for a while - the tax situation isn't as scary as it seems once you get organized! The key is treating this like a real business from day one. I use a simple spreadsheet to track my daily earnings, miles driven, and any expenses. At the end of each week, I calculate roughly 30% of my profit and transfer it to a separate "tax savings" account. For tracking mileage, I highly recommend using an app like Stride or MileIQ that automatically tracks your drives. Manual tracking gets tedious and you'll inevitably forget to log trips. One thing that surprised me: even though you're paying self-employment tax (which feels like a lot), you're also earning Social Security credits that count toward your future benefits. So it's not just money disappearing - you're building toward your retirement too. The $600 threshold just determines whether DoorDash sends you a 1099 form, but you're technically required to report ALL income regardless of whether you get a form. Keep good records and you'll be fine!

As someone who's been dashing for about 8 months, I'd say it's definitely worth it if you approach it right from the start. Here's what I wish someone had told me when I was at your stage: First, don't stress too much about the $600 threshold - others have explained it well, but just know you're still a ways from hitting it based on your current earnings. What I found most helpful was setting up systems early: 1. Download a mileage tracking app immediately (I use Stride - it's free and designed for gig workers) 2. Open a separate savings account just for taxes and transfer 25-30% of your weekly profit there 3. Keep a simple log of any equipment you buy (phone mount, insulated bags, etc.) The tax situation seems overwhelming at first, but it's really manageable once you get organized. I actually ended up owing less than I expected because the mileage deduction is pretty generous - I drive about 70% of my total earnings in deductible miles. One tip: don't just focus on gross earnings when deciding if it's "worth it." Track your profit after expenses for a few weeks to see your real hourly rate. That'll help you decide if you want to continue and which times/areas are most profitable for you. You're smart to think about this stuff early rather than scrambling at tax time like a lot of people do!