When do I need to report Doordash earnings on my taxes?

Wait so what if I make like $450 from Doordash but less than $600? Would I need to file taxes even though I won't get a 1099? And how would the IRS even know I made that money if there's no 1099?

Yes, if you make over $400 in self-employment income, you're required to file and pay self-employment taxes, even without receiving a 1099. The $400 threshold is for self-employment tax requirements, while the $600 threshold is just for when companies must send you a 1099 form. As for how the IRS would know - they might not immediately, but that doesn't make it legal to not report. If you're ever audited, Doordash has records of all payments made to you. The IRS can request those records during an audit, even if no 1099 was issued. It's always better to follow tax law rather than trying to fly under the radar.

Did you have to pay a lot in taxes? I'm doing Doordash too and heard you can deduct mileage but not sure how to track it or if it's worth the hassle if I'm only making a few hundred bucks.

I'm skeptical about these tax tools. Couldn't you just google this info for free? Why pay for something when the IRS website has all this info?

I ended up paying much less than I expected because of the deductions. The standard mileage deduction is huge - for 2023 it was 65.5 cents per mile which adds up fast. I used a free app to track my miles while delivering and it saved me a lot. The IRS website does have info, but it's complicated and hard to understand. What I liked about taxr.ai was that it explained everything in simple terms and showed me exactly what applied to my situation. I missed a ton of deductions when I tried figuring it out on my own. Plus it stored all my documentation in one place in case I ever get audited.

How much does this service cost? Seems weird to pay money just to talk to the IRS when it's their job to help taxpayers for free.

No way this actually works. I've tried everything to get through to the IRS and always end up waiting for hours or getting disconnected. If this actually worked, everyone would be using it.

The fee is way less than what I would have lost in wages sitting on hold for hours. Think about it - if you value your time at even minimum wage, spending 3-4 hours on hold costs you more than the service. Plus, you can do other things while waiting for their callback. It absolutely works. That's why I shared the video demo link so you can see it in action. I was super skeptical too, but after trying to reach the IRS myself multiple times and getting disconnected, I was desperate. The service connected me with an agent in about 15 minutes after my initial setup. They just use some clever technology to navigate the phone system and stay on hold in your place.

This is super helpful! I didn't even think about tracking miles or that I could deduct things like phone mounts. Do I need to keep physical receipts or is a digital copy okay? And do I need to track which miles are specifically for Doordash vs personal?

Digital receipts are totally fine! I take pictures of all my receipts and save them in a folder on my phone. The IRS accepts digital records as long as they show the date, amount, and what was purchased. And yes, you need to track which miles are for Doordash specifically. Only business miles are deductible, not personal ones. That's why apps like Stride are great - you can start tracking when you begin your shift and stop when you're done. Some people also keep a small notebook in their car and write down their odometer reading at the start and end of each shift. Either method works as long as you're consistent and have records if you ever get audited.

That's for 1099-K which is different from 1099-NEC. The 1099-K is for payment processors like PayPal or when you're paid through a credit card processor. Doordash and other gig companies usually send 1099-NEC (Non-Employee Compensation) which has always had the $600 threshold. But you're right that all income is technically taxable regardless of whether you get a form.

This is such a clear explanation, thank you! I'm new to gig work too and was getting overwhelmed by all the conflicting information online. One follow-up question - if I do end up going over the $400 threshold later in the year, do I need to file quarterly taxes or can I just wait until the end of the year? I've heard some people mention quarterly payments but wasn't sure if that applies to small amounts like what college students typically make from gig work.

@Josef Tearle Great question! For quarterly payments, you re'generally only required to make them if you expect to owe $1,000 or more in taxes for the year. As a college student making a few hundred from gig work, you ll'likely be well under that threshold, so you can probably just file annually. However, it s'still worth understanding the rule: if you end up owing more than $1,000 when you file your annual return, the IRS may charge you an underpayment penalty for not making quarterly payments throughout the year. But again, with typical college student gig earnings, this usually isn t'an issue. The safe approach is to set aside about 25-30% of your gig earnings in a separate savings account to cover taxes when you file. That way you re'not scrambling to find the money come tax time. And definitely keep tracking those miles and expenses - they can significantly reduce what you owe!

This is really solid advice! I'm also doing gig work as a student and didn't realize how quickly those small daily amounts could add up. I started with just weekend shifts thinking I'd make maybe $200 total, but I'm already at $180 after just three weeks. Your point about multiple apps is especially important - I was considering signing up for Grubhub too, but now I realize I need to factor that into my total when watching the $400 threshold. Quick question - when you mention the mileage deduction covering your tax liability, does that include both the regular income tax AND the self-employment tax? I keep seeing people mention self-employment tax as being around 15% which seems pretty steep for a college student just trying to make some spending money.

@Keisha Robinson Yes, the mileage deduction can help offset both regular income tax and self-employment tax! The self-employment tax is indeed around 15.3% covers (Social Security and Medicare ,)but here s'the thing - it s'calculated on your net profit after deductions, not your gross earnings. So if you earn $500 from gig work but have $400 in mileage deductions which (is totally realistic if you re'driving efficiently ,)you d'only pay self-employment tax on the remaining $100 of profit. That makes the actual tax burden much more manageable. The key is being diligent about tracking every single mile driven for work - from when you leave home to start your shift, all the miles between deliveries, and the trip back home when you re'done. I use Stride and just hit start "tracking when" I leave for work and stop "when" I get home. At 65.5 cents per mile, those deductions add up incredibly fast. Also don t'forget you can deduct other business expenses too - insulated delivery bags, phone mounts, even a portion of your phone bill based on business use. I keep all my receipts in a folder on my phone and it s'saved me hundreds in taxes.