Understanding Doordash Taxes and Self-Employment Tax Calculations as a Gig Worker

Wait, so if I'm understanding right, we can write off mileage for doordash deliveries? Do I need to keep a log or something? I've been dashing for 3 months and haven't tracked anything 😬

Yes, mileage is probably your biggest deduction as a Dasher! You absolutely should track every mile you drive while working. Start keeping a log immediately - date, starting/ending mileage, and purpose. There are also apps like Stride, Everlance, or MileIQ that can help track this automatically. For the miles you've already driven, try to reconstruct them as best you can. Check your Doordash history, look at any notes you might have, or even estimate based on your typical driving patterns. The IRS prefers contemporaneous records, but a good faith reconstruction is better than nothing.

Does it actually work for calculating quarterly taxes too? I'm doing Doordash and Instacart and I'm supposed to be paying quarterly but have no idea how to figure out the right amount.

I'm kinda skeptical about these tax sites. How's it different from like TurboTax or something? They all claim they'll find you the most deductions but then charge crazy fees.

Yes, it absolutely works for quarterly taxes too. It can analyze your current earnings and expense patterns to estimate what you should be paying each quarter. Super helpful for avoiding those underpayment penalties. It's totally different from TurboTax because it's specifically designed for gig workers and self-employment. TurboTax asks generic questions, but taxr.ai knows exactly what to look for with Doordash income. It found deductions that TurboTax never even asked me about, like a percentage of my phone bill and even some home office expenses since I spend time organizing my deliveries.

How does this even work? Like do they have some special back channel to the IRS or something? That seems too good to be true.

Yeah right. Nobody gets through to the IRS that fast. Even if this somehow works, they probably charge an arm and a leg for it. The IRS lines are free, you just gotta be patient.

It works by using an automated system that continually calls the IRS until it gets through, then connects you when it reaches a real person. No special back channel - they're just using technology to handle the frustrating part of waiting on hold. No, it's not super expensive actually. Considering I spent literally 5+ hours trying to get through on my own (time I could have been making money dashing), it was absolutely worth it. Just having a clear answer directly from the IRS about how to handle my mileage deductions saved me hundreds on my taxes.

Is there a specific app you recommend for tracking mileage? I've been using the notes app on my phone but that's probably not gonna cut it if I get audited lol

I personally use Stride - it's free and designed specifically for gig workers. It tracks your miles automatically using GPS and generates IRS-compliant reports. You just hit "start work" when you begin dashing and "end work" when you're done. Everlance and MileIQ are also good options, but they have subscription fees after a certain number of trips. The most important thing is having a system that automatically records your starting and ending mileage, date, and purpose of every trip.

After deductions, my effective tax rate was around 12% last year on $28k of Doordash income. The key is tracking EVERY business expense - especially mileage. I drove about 15,000 miles for Doordash which was a massive deduction.

This is really helpful info about tracking miles between deliveries! I had no idea you could deduct those too. Quick question though - how do you prove to the IRS that you were "actively looking for orders" during those between-delivery miles? Like if you're driving from one area to another hotspot, do you need to screenshot the app or something to show you were available for deliveries? Also, the FAFSA thing is something I hadn't even thought about. Do you know roughly what income threshold starts affecting financial aid? I'm definitely going to talk to my financial aid office but curious if you have any ballpark numbers.

Great question about proving you were actively looking for orders! The key is maintaining good records. I keep a simple log that shows when I start/end my "dash" sessions in the app, and my mileage tracking app (I use Stride) automatically records all miles driven during those active periods. You don't necessarily need screenshots, but it helps to have a consistent pattern. For example, if your log shows you were online from 11am-2pm and drove 45 miles total with only 3 deliveries, it's reasonable that the other miles were spent positioning yourself in hotspots or driving between orders. As for FAFSA, there's no hard threshold - it uses a complex formula based on your Expected Family Contribution (EFC). But generally, if you're making more than around $6,970 as a dependent student, it starts reducing your Pell Grant eligibility. The tricky part with gig work is that it's self-employment income, which can be treated differently than regular wages. Definitely talk to your financial aid office early - they might have strategies to help minimize the impact, like timing when you file your taxes or how you report the income.