DoorDash drivers are now required to pay taxes on their earnings, which has caused many people to wonder how this will affect them.
In this article, we will discuss everything you need to know about the new 2022 tax regulations for DoorDash drivers.
Taxes Explained and What It Means for Drivers
As a DoorDash driver, it’s important to know how your taxes will be affected by the new 2022 tax regulations. Here’s what you need to know about DoorDash taxes and how they’ll impact you.
The biggest change for drivers is that DoorDash will now be required to withhold taxes from each driver’s earnings. This means that net earnings (what drivers actually take home) will be lower than they were before.
The good news is that drivers are still able to deduct expenses like gas and car maintenance from your gross earnings (the amount you earn before taxes are withheld). This means that a driver’s actual tax liability may not be as high as you think.
Ultimately, the new tax regulations for DoorDash drivers will result in higher taxes for some and lower taxes for others.
What are the details of the new tax regulations for DoorDash drivers?
1. The first and most obvious deduction is your vehicle expenses. This includes gas, oil changes, repairs, and maintenance. If you use your personal vehicle for business purposes, you can deduct a percentage of your total vehicle expenses.
2. You can also deduct cell phone expenses if you use your phone to communicate with customers or receive orders. This deduction is limited to the amount of your monthly bill, not the cost of the phone itself.
3. Finally, you can also deduct any business-related fees that you pay to DoorDash.
All these expenses are entered onto IRS Schedule C or Schedule C-EZ. And remember it is important to Keep Accurate Records! Just in case.
How can DoorDash drivers file their taxes?
As a DoorDash driver, you are considered an independent contractor. You are now responsible for filing and paying taxes for each calendar year. You will need to file a 1099 form attached to the 1040 tax form. The 1099 form is used to report income from services such as DoorDash.
You should receive a separate 1099 form for each year that you drive for DoorDash that shows the income that you earn from your participation in the DoorDash program on your tax return.
What about driver expenses? You can use Schedule C or Schedule C-EZ to report all your business income and expenses.
To Find the Tax Forms You Need