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Can You Get a Tax Refund with Doordash? How the Income Tax Process Works for Dashers

The income tax process for Doordash drivers is not much different than it is for ordinary employee taxes. Sometimes we make taxes a bigger mystery than they have to be.

The difference for Dashers isn't really in the income tax process. Instead, it's how your Doordash income is determined. Your actual income as an independent contractor is your profits (what's left over after expenses). We discuss that in more detail in other parts of this series. 

In the jaws of high taxes concept of a Dasher in a suit trapped in jaws of dinosaur head with teeth shaped like the word Tax.

In this article, we dive into what happens next. We'll discuss the four processes involved in determining your income tax. When you understand those processes, income tax becomes less mysterious. This post looks at:

The Doordash tax series (and what else is in it)

It's impossible to cover how taxes work in one article adequately. For that reason, we put together a series that goes deeper into different aspects of taxes. We start with an overview on how does Doordash work with taxes, then go into more detail on various tax topics. 

We'll link to other articles in the series as we go along. You can also see a complete list of our tax series articles

The purpose here is to examine the entire income tax process and how your profits impact it as an independent contractor. This is about income taxes for Dashers in the United States. We do not get into state or local income taxes or taxes in other countries.

Do not take anything in this article or this series as tax advice. We only intend to educate and inform, explaining how taxes work. You should seek a tax professional to guide you with questions and advice about your personal circumstances and taxes.

Step 1: Adding Income

Two hands counting a large stack of money with label "Adding up Doordash and Other Income."

As an independent contractor, you use the same 1040 tax form that you use as an employee. 

The first part of that form is where you add up your income. Your total W2 wages go on line 1, with several other income types on the following lines. 

Screenshot of the income section of IRS form 1040.

Here's where your Doordash earnings come in:

First, that the money from the 1099 Doordash sends you (and add that to income from other delivery services iff applicable). You'll enter that on IRS form Schedule C: Profit or Loss from Business. On the same form, you'll subtract your Doordash driver tax deductions. Those expenses include your Doordash mileage tax deduction.

You can read more about how to fill out Schedule C as a Dasher. Your profits are added to other income and listed on line 8 of your 1040. Add that to all other income to determine total income.

Step 2: Reducing income with tax deductions and adjustments.

Fingers turning a tax knob with blue light downward, with label "Reducing taxable income with deductions."

This part of the process is where you subtract tax deductions and income adjustments to determine taxable income. It's also where you decide whether to itemize your tax deductions (mortgage, charitable donations, healthcare costs, etc.) or claim the standard tax deduction.

Dashers need to understand that this is NOT where you claim your mileage and other expenses. You claim those expenses on Schedule C. 

Why is this so important? Because you can claim your expenses as a Dasher regardless of whether you itemize your deductions. Too many contractors mistakenly believe they can't take those deductions if they use the standard tax deduction. 

There are several special deductions that self-employed can claim as income adjustments. This means you can take these even with the standard deduction. They include:

These deductions and income adjustments are subtracted from your total income to determine taxable income. 

Step 3: Calculate your income tax bill.

Calculator with red "tax" button, fountain pen over a legend, with label: Calculating Your Doordash Tax Bill.

Understand that this is not where you determine what to pay or if you get a refund. That part comes next. This is where you figure out what you would have to pay if you didn't have any withholding, payments, or tax credits.

You calculate income tax as a percentage of taxable income. It's a progressive tiered system. Your tax rate (tax bracket) increases as your income gets higher. 

The calculations can be complex, so comparing your income to the IRS tax tables is easier.

Screenshot of the 2021 IRS tax table for income between $24,000 and $25,000 for a single filer, with the tax amount for $24,000 circled in red ($2,684).

Say you're single with $24,000 in taxable income. Compare that to the screenshot of the tax table above (from the 2021 tax year); your tax bill is $2,684.

The tax brackets can be confusing. The top tax percentage isn't applied to your entire income but in steps. The first several dollars are taxed at 10%, and only the income exceeding the next threshold is taxed at a higher rate.

For example, the 12% tax bracket for a single filer starts at $12,276 (2022). If they earned $20,000, only the last $7,725 is taxed at 12%. 

Infographic showing income tax brackets for the 2022 tax year.

There's another piece of the puzzle for Dashers who made a profit. Once you've determined your income tax bill, you need to add other taxes to that bill. 

Doordash does not withhold Social Security and Medicare taxes for you. You must pay those taxes in the form of self-employment taxes, which are 15.3% of your profits. You can read more about Self-employment tax Doordash Dashers and other contractors have to pay

Add your self-employment tax and any other applicable taxes to your income tax bill to get your total tax bill.

Step 4: Finding out if you pay in or get a refund

Finger touching calculator reading "REFUND" next to stack of money, label: Applying Payments, Credits, Paying in & Getting Refund.

Now that you know what you owe in taxes, it's time to determine if the bill has already been paid. More importantly, you find out if you get a refund or not.

This is where payments and tax credits are applied to your bill, including:

  • Paycheck withholding
  • Estimated quarterly payments
  • Non-refundable tax credits
  • Refundable tax credits.

The difference between tax credits and tax deductions

Step 3 involves subtracting tax deductions from your total income. In step 4, you apply tax credits to the bill.

Credits and deductions are very different from one another. Tax deductions reduce taxable income and happen before calculating the tax bill.

Tax credits act like payments against your tax bill AFTER calculating it.

If you're in the 10% tax bracket, a $500 tax deduction might reduce your tax bill by $50. However, a $500 tax credit reduces the tax bill by the entire $500.

Refundable and non-refundable tax credits.

Some tax credits are only applied to your tax bill if there's an outstanding balance. You will not receive a refund if your non-refundable tax credits add up to more than your income tax bill. This is why they're called non-refundable.

Some common non-refundable tax credits include:

  • Electric vehicle and alternative energy credits
  • Childcare credits
  • Certain education credits
  • Adoption credits
  • The saver's credit

Refundable tax credits act like cash payments to your tax bill. You will get a refund if your total refundable credits exceed your tax bill. Some of those credits include:

  • Earned income credit
  • American Opportunity credits for education
  • Part of the child tax credit

Many of these credits have income restrictions. Consult with your tax professional to learn more about if you qualify for any of these.

Determining the final balance

Step 4 of the tax process starts with your income tax bill. First, it subtracts non-refundable credits up to the outstanding balance from that bill. The new tax balance after this step is never less than $0.

Second, additional taxes (including self-employment tax) are added to the tax balance. The reason it's added here is to prevent non-refundable tax credits from being applied to your self-employment taxes. An employee can not reduce their FICA taxes using these tax credits, and this step prevents the self-employed from having an unfair advantage. 

Finally, subtract refundable credits and previous tax payments (and withholding) from the outstanding balance. If payments and refundable credits exceed the balance, you get a refund for the difference. Otherwise, you must pay the outstanding balance.

Frequently asked questions about the income tax process for Doordash delivery drivers.

What kind of tax software should I use?

My only real advice in this article is to get a tax professional, especially if you find this tax stuff overwhelming. There's incredible value when a pro who knows what to look for walks you through the process. They'll usually pay for themselves.
If you must use tax preparation software, choose a self-employed version. Less expensive and free versions typically lack Schedule C support. I've found the interview process with the free and cheap programs that do support Schedule C are not very intuitive. It's easy to miss some significant deductions if you don't know what to look for.

Can I use 1040-EZ or 1040-A to file my Doordash taxes?

Not any longer. The IRS discontinued 1040-EZ and 1040-A after the 2018 tax year.

Do I add my Doordash income to my W2 earnings?

No. Doordash drivers are not employees. You, as an independent contractor, are filing small business taxes. Instead, add your 1099 income to the income section of form Schedule C.

Do I attach my Doordash 1099 form to my tax return?

No. 1099 forms do not work the same as W2s, as your tax return does not include any 1099 information or details other than income. You will add that income to other 1099 income on Schedule C.

Where do I write off my miles for Doordash deliveries?

Your Doordash mileage deductions are written off as expenses on Schedule C. You do not claim them as itemized deductions, meaning you can claim them regardless of whether you take the standard tax deduction. Read more about mileage tracking for Doordash.

Do tax deductions and adjustments reduce my self-employment tax?

No. Income tax deductions only reduce your taxable income for income tax purposes. This is the same with FICA taxes for employees, which are due from the first dollar of income, regardless of tax deductions.

If my business operated at a loss, does that lower my taxable income?

A business loss would reduce your overall income if you had other income besides your independent contractor earnings. However, a loss would not lead to a negative amount in total income. If your losses exceeded other income, your total income would simply be $0.

Do I get a refund if my mileage deduction exceeds my income?

No. If your total income is less than $0, you simply have $0 in income taxes. Negative income does not create a negative tax bill.

Can I get a tax refund if Doordash is my only income?

There are typically ways you can get a refund when Doordash is your only source of income. The first is if you saved for taxes, making Doordash quarterly tax payments throughout the year, and your estimated payments were more than your tax bill. The second is if you are eligible for refundable tax credits such as the Earned Income Credit.

Why does my refund go down when I add miles and expenses to my Schedule C?

This usually happens for someone eligible for the Earned Income Credit. The EIC is a refundable credit, which could lead to a refund even if you didn't make any tax payments. However, the EIC requires that you have positive income. If your expenses exceed earnings, you technically didn't make any money, which disqualifies you from the Earned Income Credit.

Should I wait to file until I have the money to pay?

No. The IRS requires you to file taxes by the due date (usually April 15) regardless of whether you have the money to pay. The exception is if you file an extension. You can get in greater trouble for not filing than if you simply owe money.

Can I file an extension on my Doordash taxes?

You can file an extension which typically gives you until October 15 to submit your tax return. However, an extension does not allow you to wait until October to pay. You must estimate what you will owe and pay that amount when you file your extension.

What if I don't have the money to pay my Doordash taxes?

You can apply for a payment plan with the IRS. The IRS has a short-term payment option, which gives you 180 days to pay your balance without setup fees. You can also apply for a long-term installment plan that has additional costs. Penalties and interest may still be assessed if you have a payment plan.

When will I get my refund for Doordash taxes?

The IRS says they issue more than 9 out of 10 refunds in less than 21 days. Many things can slow that down, such as filing by paper instead of online. Processing the refund for complex returns can take six months or longer. You can learn more about the status of your refund by visiting the IRS's Where's My Refund page.

Am I more likely to be audited as a Doordash driver?

Some parts of being self-employed can increase your audit risk, though the odds are still relatively low. Significant tax deductions or unusual expense claims can raise a red flag. The IRS is planning to increase audit rates thanks to increased funding from the Inflation Reduction Act. However, the administration insists they only intend to target higher earners. Independent contractors' audit risk is relatively low unless deductions are out of the ordinary. If you follow the IRS guidelines for business expenses (things that are ordinary and necessary for your business), you are relatively safe. Even if you are audited, if your write-offs are legitimate and well documented, you should be in good shape.

Could this help someone else? Please share it.

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Ron Walter of Entrecourier.com

About the Author

Ron Walter made the move from business manager at a non-profit to full time gig economy delivery in 2018 to take advantage of the flexibility of self-employment. He applied his thirty years experience managing and owning small businesses to treat his independent contractor role as the business it is.

Realizing his experience could help other drivers, he founded EntreCourier.com to encourage delivery drivers to be the boss of their own gig economy business.

Ron has been quoted in several national outlets including Business Insider, the New York Times, CNN and Market Watch.

You can read more about Ron's story,, background, and why he believes making the switch from a career as a business manager to delivering as an independent contractor was the best decision he could have made.

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