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I started working for Doordash as a food delivery worker (self-employed contractor I think is the status).

I read (Do I need to pay taxes as a food delivery worker if I make less than $12,000 in a year?) that in 2020 I'll be able to deduct 57 cents for each mile driven while on the job.

I got an app (gridwise) that tracks my mileage when I work. Is that proof enough for mileage or do I need gas receipts, pictures of my dashboard, or anything else?

Also, that means I deduct 57.5c from what I declare, not what I have to pay, right? So let's say I drove 10k miles by the end of the year and made $6k, I would declare only 6,000 - 10,000 * 0.575 = $250?

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For deducting vehicle business expenses from your business income, you have two options:

  1. Deducting the actual expenses for your vehicle (depreciation, fuel, maintenance, etc.)

  2. Taking the standard mileage deduction (57.5 cents per mile in 2020)

For most people that are using their vehicle for both business and personal travel, the standard mileage deduction is the easiest and best method. If you do this, you only need to keep track of how many of the miles you drive are related to the business.

The IRS wants you to have some sort of log that shows the miles that you drove for business. A paper log book is good, but an app works just as well. Photos of the dashboard are not necessary.

If you are taking the standard mileage deduction, you do not need to keep track of any maintenance records or fuel receipts; the only thing that matters is how many business miles you drove.

When you fill out your 2020 taxes next year, your business will be accounted for on Schedule C. On this form, you need to declare all the revenue (income) for your business. So if DoorDash ends up sending you $6000 in 2020, then $6000 is what will get entered at the top of Schedule C. DoorDash will also be giving you a 1099-NEC form that will show you exactly how much they sent you, and this amount will also be reported directly to the IRS. But you do not pay tax on this entire amount. On Schedule C you will also report any business expenses that you had in 2020. Mileage will be the biggest deduction, and there is a place on this form to enter in the number of miles you are claiming. If you had to purchase any other supplies for your business (maybe insulated bags?), you can also claim those expenses.

Revenue minus Expenses is your business profit, and this will be calculated on Schedule C. If your total business revenue was $6000, and you drove 10,000 miles to earn it, your business profit would be only $250. It also would mean that you were drastically underpaid. :)

This business profit is what determines how much tax you will pay. There are two types of tax on this profit: income tax and self-employment tax. For income tax, the profit will get added to any other income that you have from any other jobs on your 1040 form and will increase how much income tax you will pay.

In addition to that, you will probably need to pay Self-Employment tax, which is 15.3%* of your profit. This gets calculated on Schedule SE. There are minimum levels of profit you need to reach before you start to owe self-employment tax, so you need to look at the directions at tax time to figure out if you will owe it or not. If you truly only end up with $250 profit, you won't be paying any Self-Employment tax.


* Not exactly; see dave_thompson_085's comment for some details on this. As you can see, the math, thresholds, limits, and deductions can get a little complicated, so follow the instructions carefully, or better yet, get some tax software (or a paid professional) to help you out at tax time.

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    Nits: as long as you're under the Social Security cap, SE tax is 15.3% of 92.35% of SE income, net ~14.13%; this makes it equal to employees where the employee 7.65% is counted in your income-taxable wages, but the employer 7.65% is not. Similarly the SE income you report on 1040 is reduced (schedule 1 line 14) by half your SE tax (just as employer FICA is not counted in income) plus now (after 2017) you also deduct 20% of QBI, so effectively only 72.35% of SE income is subject to income tax. Oh, and starting this year (2020) NEC is now 1099-NEC not 1099-MISC. – dave_thompson_085 Oct 11 at 3:17
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    @dave_thompson_085 Thanks for the extra details. I have tweaked my answer a bit. – Ben Miller - Remember Monica Oct 11 at 15:56
  • Thank you so much for the detailed answer and my apologies for accepting so late. I've been sleeping in my car and struggling to find an internet connection, but I found a way today finally :) – deliveryguy Oct 14 at 1:50

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