Doordash delivery drivers in the United States are considered self-employed contractors. As such, they’re responsible for paying their own taxes, which include federal income tax, self-employment tax (which covers Medicare and Social Security), and state and local taxes. The amount of taxes taken out of a Doordash driver’s earnings will depend on a number of factors, including their income level, filing status, and the state and local tax rates where they live.
Self-Employment Taxes
As a Doordasher, you’re considered self-employed. This means you’re responsible for paying both the employee and employer portions of Social Security and Medicare taxes (FICA taxes). The combined rate for self-employment taxes is 15.3%, which is split as follows:
- 6.2% for Social Security
- 1.45% for Medicare
- 7.65% for the additional Medicare tax for individuals with higher incomes
However, you can deduct half of your self-employment taxes from your income when filing your taxes. This reduces your effective self-employment tax rate to 7.65%.
In addition to FICA taxes, you’ll also need to pay federal and state income taxes. The amount of income tax you owe will depend on your income and filing status.
Here’s a table that summarizes the taxes you may need to pay as a Doordasher:
| Tax Type | Rate | Additional Medicare Tax Threshold |
|---|---|---|
| Social Security | 6.2% | N/A |
| Medicare | 1.45% | N/A |
| Additional Medicare Tax | 7.65% | $200,000 for single filers, $250,000 for married couples filing jointly |
| Federal Income Tax | Varies based on income and filing status | N/A |
| State Income Tax | Varies by state | N/A |
Federal Income Taxes
Federal income taxes are calculated based on your taxable income, which is your total income minus certain deductions and exemptions. The amount of federal income tax you pay depends on your filing status and taxable income bracket.
- Single: 10%, 12%, 22%, 24%, 32%, 35%, 37%
- Married Filing Jointly: 10%, 12%, 22%, 24%, 32%, 35%, 37%
- Married Filing Separately: 10%, 12%, 22%, 24%, 32%, 35%, 37%
- Head of Household: 10%, 12%, 22%, 24%, 32%, 35%, 37%
For example, if you are single and have a taxable income of $25,000, you would pay $2,500 in federal income tax (10% of $25,000).
| Filing Status | Taxable Income Bracket | Tax Rate |
|---|---|---|
| Single | $0 – $10,275 | 10% |
| Single | $10,275 – $41,775 | 12% |
| Single | $41,775 – $89,075 | 22% |
| Single | $89,075 – $170,050 | 24% |
| Single | $170,050 – $215,950 | 32% |
| Single | $215,950 – $539,900 | 35% |
| Single | $539,900 and above | 37% |
Taxes on Doordash Earnings
As an independent contractor for Doordash, you are responsible for paying your own taxes, including federal, state, and local taxes. The amount of taxes you pay will vary depending on your income, deductions, and other factors.
Federal Taxes
Doordash does not withhold federal income taxes from your earnings. You are responsible for paying these taxes yourself. The amount of federal income tax you owe will depend on your income and filing status. You can use the IRS Tax Withholding Estimator to calculate your estimated federal income tax liability.
State and Local Taxes
In addition to federal taxes, you may also be responsible for paying state and local taxes. The rules for state and local taxes vary from state to state. You should contact your state and local tax authorities to find out how much you owe in taxes.
Self-Employment Taxes
In addition to income taxes, you are also responsible for paying self-employment taxes. Self-employment taxes include Social Security and Medicare taxes. The self-employment tax rate is 15.3%.
Estimated Taxes
If you expect to owe more than $1,000 in taxes, you may need to make estimated tax payments. Estimated tax payments are due on April 15, June 15, September 15, and January 15 of each year. You can use Form 1040-ES to calculate your estimated tax payments.
Deductions
You may be able to reduce your tax liability by taking deductions for certain expenses. Some common deductions for independent contractors include:
- Home office expenses
- Vehicle expenses
- Meal expenses
- Travel expenses
Keeping Records
It is important to keep good records of your income and expenses. This will help you to accurately calculate your tax liability and avoid overpaying taxes. You should keep records of the following:
- Earnings from Doordash
- Expenses related to your Doordash work
- Mileage driven for Doordash
- Meal expenses
- Travel expenses
Taxes in Different States
The following table shows the state income tax rates for the top five states with the highest number of Doordash drivers:
| State | Income Tax Rate |
|---|---|
| California | 1-13.3% |
| New York | 4-8.82% |
| Florida | 0% |
| Texas | 0% |
| Pennsylvania | 3.07% |
Doordash does not withhold state income taxes from your earnings in any state. You are responsible for paying these taxes yourself. The amount of state income tax you owe will depend on your income and filing status. You should contact your state tax authorities to find out how much you owe in taxes.
Doordash Taxes: Understanding the Deductions
As a Doordasher, managing your taxes can be tricky, especially when considering the deductions you’re entitled to. Here’s a comprehensive breakdown of how to maximize your tax savings:
Mileage Deductions: A Path to Savings
Doordashers can claim mileage deductions to reduce their taxable income. The standard mileage rate set by the IRS for 2023 is 65.5 cents per business mile. Here are the key things to keep in mind:
- Keep an accurate record of your miles using a mileage tracking app or manual mileage log.
- Only deduct miles driven for Doordash deliveries, not personal errands or commuting.
- The mileage deduction can significantly reduce your taxable income, especially if you drive a lot.
Tax-Deductible Expenses: What’s on the List?
- Fuel and gas expenses
- Vehicle maintenance and repairs
- Car insurance premiums
- Phone and internet expenses
- Delivery bags and other equipment
- Home office expenses (if you use a portion of your home for deliveries)
Understanding Taxable Income and Rate
Your taxable income is the amount of income subject to taxation. It’s calculated by subtracting your deductions from your total income. The tax rate you pay depends on your income level and filing status.
| Filing Status | Tax Rate |
|---|---|
| Single | 10% – 37% |
| Married Filing Jointly | 10% – 35% |
| Married Filing Separately | 10% – 37% |
| Head of Household | 10% – 35% |
Remember, Doordash is responsible for withholding taxes from your earnings, so you may need to make additional tax payments if your deductions are significant.
Alright folks, I hope I’ve shed some light on the tax situation for Doordashers. Remember, taxes can vary based on individual circumstances, so it’s always best to consult with a tax professional to get the most personalized advice. Thanks for stopping by and learning more about the ins and outs of Doordash taxes. If you have any more questions or want to dive deeper into other money-related topics, be sure to check back later. We’ve got plenty more articles to keep you informed and financially savvy. See you soon!