Lower Your Tax Bill: 9 Doordash Tax Deductions to Claim Now

As a DoorDash delivery driver, you create your schedule and decide which orders to accept – and you’ll earn extra cash. You can also work for delivery apps such as Grubhub and Uber Eats.

Dashers enjoy the independence of self-employment. However, they also have the responsibility of small business taxes.

Business taxes can feel complicated, and you don’t want to pay more than you owe. This article explains everything you need to know to file taxes as a DoorDash delivery driver. We’ll help you find DoorDash tax deductions so you can lower your tax bill and keep more of your hard-earned income.

9 Tax Deductions DoorDash Drivers Can Claim

DoorDash drivers represent independent contractors, which means Dashers file business tax returns.

As an independent contractor, you can deduct business-related expenses on your DoorDash tax return. Business expenses include operating costs such as the following: 

• Transportation expenses

• Tools, supplies, and services

• Fees and commissions

• Certain self-employment costs

The following list of DoorDash tax deductions will help you prepare for tax season. 

For personalized, hands-on help with your delivery driver tax return, schedule a free consultation with the professional at 1-800Accountant. We’ll take the tedious calculations off your plate and file your returns on time. 

1. Vehicle or Bicycle Expenses

Whether you use your car or bicycle for deliveries, you can deduct several transportation costs on your income tax return.

Depreciation Expense

Depreciation refers to writing off business assets over several years rather than deducting the entire cost in the year of purchase. Business owners must follow IRS depreciation rules for assets exceeding $2,500. 

Numerous factors affect the amount and duration of your depreciation expense. Depending on the value of your DoorDash car or bike, you may be eligible for depreciation expense deductions. We recommend consulting tax professionals for help with depreciation calculations.

Parking Fees and Tolls

Keep your receipts from parking garages and tolls related to your DoorDash deliveries. You can deduct the charges on your business tax return. 

Vehicle Expenses: Standard Mileage Deduction or Actual Expense Method

Business car expenses can generate tax write-offs using the standard mileage deduction or the actual expense method. 

Standard Mileage Deduction

Dashers can deduct business mileage driven in a motor vehicle. The 2024 standard mileage rate is 67 cents per business mile. Business owners using the standard mileage deduction must follow restrictions on depreciation expense deductions and car payments.

Actual Expense Method

If your vehicle operating expenses exceed your standard mileage deduction, you can opt for the actual expense method for your transportation deductions. 

Instead of deducting your business mileage, determine your expenses for business-related travel. For example, consider the following costs. 

• Insurance

• Registration fees

• Licenses

• Gas

• Repairs and maintenance

The actual expense method generally allows for larger depreciation expense deductions. Tax professionals can help you determine whether the standard mileage or actual expense deduction is better for your business.

Bicycle Expenses

Dashers can deduct the costs of using a bicycle for deliveries. For example, you can write off the business-use portion of your biking helmet, chain lock, and repair expenses. 

Mileage deductions apply to vehicles only, but your bike could generate other write-offs. Consult tax professionals to determine whether your delivery bike qualifies for depreciation expense.

2. Cell Phone and Data Expenses

You need your cell phone to use the DoorDash app, accept deliveries, and navigate to your destination. You can deduct part of your bill since your phone service and data costs represent necessary business expenses. 

Track the portion of your cell phone and data usage related to your deliveries so you can deduct the business-related cost on your tax return.

3. Equipment, Tools, and Supplies

Many delivery drivers use temperature-controlled packaging to keep items hot or cold. You can write off your DoorDash tools and supplies. 

Consider the following examples of delivery equipment for tax deductions: 

• Hot bags and insulated packaging

• Coolers and ice packs for cold deliveries

• Delivery-related clothing, such as a helmet or biking gloves

• Backpacks to carry food or groceries

4. Business License Fees

Depending on where you live and work, local laws may require obtaining a business license. License and business registration paperwork often generate costly filing fees for business owners. 

Fortunately, you can write off the costs of your business license and registration. Save your license application and paperwork so you can deduct the fees on your DoorDash business tax return.

5. Services

Dashers rely on professional services for deliveries and business management. You can write off the costs of your business services, including the following.

• Mileage tracking software

• Premium subscriptions to navigation apps

• Bookkeeping and expense management software, such as TurboTax

• Outsourced accounting fees

6. Home Office Deduction

IRS rules allow business owners to deduct certain home office costs. Eligible taxpayers include self-employed individuals, such as DoorDash delivery drivers. You can likely take the home office deduction if you use part of your home for business-only activities.

You can calculate your deduction based on the percentage of your home dedicated to your business. We recommend reviewing the IRS instructions and talking to your professional CPA for help with the calculations.

7. Self-Employment Tax Deduction

Many freelancers pay self-employment tax on their earnings. Employers and employees split Social Security and Medicare taxes, but independent contractors must pay both portions.

Fortunately, the self-employment tax generates a business tax write-off for small business owners. Freelancers, including DoorDash drivers, can deduct half of their self-employment taxes on their income tax returns.

8. Self-Employed Health Insurance Deduction

DoorDash delivery drivers who qualify for the self-employed health insurance deduction can write off certain health insurance costs. To qualify, freelancers must make a profit and cannot have access to employer-subsidized health insurance plans.

The self-employed health insurance deduction reduces your business income. Freelancers must complete IRS Form 7206, Self-Employed Health Insurance Deduction, to determine the write-off. 

9. Qualified Business Income Deduction

DoorDash delivery drivers can take the qualified business income (QBI) deduction, which allows small business owners to deduct 20% of qualifying self-employment income.

Your outsourced tax professionals can help you calculate your QBI deduction and report the write-off on your income tax return.

How to Claim Your DoorDash Tax Write-Offs

Follow our guide to maximize your DoorDash tax deductions and lower your income tax bill. Keep reading to learn which tax forms to file and what documentation to keep for support. 

Tax Forms for DoorDash Drivers

IRS Form 1099-NEC

DoorDash delivery drivers operate as independent contractors, meaning they receive 1099 forms at tax time. DoorDash sends a Form 1099-NEC, Nonemployee Compensation, to each contractor to report their total earnings for the tax year.

As a Dasher, you won’t need to file Form 1099, but you’ll receive the form as support for your tax return.

IRS Form 1040

U.S. individuals generally file IRS Form 1040, U.S. Individual Income Tax Return, to report taxable income and calculate the tax liability for the year.

IRS Schedule C (Form 1040)

As a DoorDash delivery driver, report your business income on IRS Form 1040, Schedule C, Profit or Loss from Business (Sole Proprietorship). Schedule C reports your DoorDash self-employment income and business tax deductions. 

If you’ve set up a different business entity, check with your CPA to confirm which tax return you should file. 

IRS Schedule SE (Form 1040)

IRS Form 1040, Schedule SE, Self-Employment Tax, calculates your self-employment tax liability. 

DoorDash drivers should use Schedule SE to report freelance income and calculate the self-employment tax liability. You’ll also need to pay income taxes, but you can deduct half of your self-employment tax. 

IRS Form 1040-ES

The IRS requires taxpayers to pay taxes throughout the year, not just when filing their tax returns. Freelancers who receive 1099s must make quarterly income tax payments to avoid fines and penalties. 

Use Form 1040-ES, Estimated Taxes for Individuals, to calculate and pay quarterly taxes. The form includes payment vouchers and instructions for filing online.

When you work with 1-800Accountant, your dedicated accountant can monitor your income throughout the year. We’ll make accurate, timely quarterly tax payments so you can avoid penalties.

Documentation DoorDash Drivers Should Keep

The IRS can audit taxpayers’ returns for up to three years (or longer, in some situations). To prepare for an audit, Dashers should save support for their business tax returns. 

Keep the following documents in addition to your other income tax return paperwork:

• 1099 forms

• Receipts for business purchases

• Mileage log, including business vs. personal travel

• Tip reports

• Vehicle or bicycle purchase paperwork

• Repairs and maintenance receipts

• Cell phone usage reports

• Bookkeeping records

• Health insurance premium payments

• Business license paperwork

• Quarterly and estimated tax payments

We recommend reviewing IRS guidance and consulting tax experts for a personalized list.

Let 1-800Accountant Help You Claim Your DoorDash Income Tax Write-Offs

Don’t let your business tax return feel overwhelming. 1-800Accountant can help you maximize your DoorDash tax deductions and lower your income tax bill. 

Personal income tax preparation and filing services help you file accurate, timely returns. Professional CPAs will monitor due dates and help with tax return calculations. You’ll gain confidence in your small business taxes with year-round advisory services.
Schedule a free consultation with 1-800Accountant for hands-on, personalized income tax services.