Whether you deliver for DoorDash, Uber Eats, Grubhub, or all three, the tax is yours to handle. What you owe depends on the forms the apps send, the miles you drive, and whether you pay the IRS during the year or only in April.
Does DoorDash take out taxes?
No. DoorDash, Uber Eats, and Grubhub withhold nothing from your payouts, and neither does Stripe Express. The 1099 they send in January shows your gross earnings with zero tax withheld. Every dollar of income tax and self-employment tax on that money is yours to pay, either through quarterly estimated payments during the year or in one bill in April.
Is DoorDash self-employment?
Yes. A Dasher is an independent contractor, not an employee, and the IRS treats delivery income as a sole proprietorship. That means a Schedule C for the profit, self-employment tax on top of income tax, and the same quarterly payment rules as any other self-employed person. This holds even when delivery is a side gig next to a W-2 job.
The 1099 forms and what they miss
Each app sends its own form in January. DoorDash and Grubhub report your gross earnings, including base pay, promotions, and in-app tips, on a Form 1099-NEC (DoorDash delivers it through Stripe Express). Uber Eats splits it up, with delivery fares on a 1099-K and promotions on a 1099-NEC, and the 1099-K shows the gross amount customers paid before Uber's fees came out. The IRS gets a copy of all of them.
What the forms do not show is any of your costs. Those come off on your Schedule C, and for delivery drivers they are big. If you run several apps, it all goes on one Schedule C. Delivery is one business no matter how many apps you drive for.
Mileage is the largest deduction
The standard mileage rate lets you deduct a fixed amount for every business mile, covering gas, maintenance, insurance, and wear in one number. For a delivery driver, business miles include driving to pick up an order, delivering it, and repositioning between offers while an app is on. For most drivers, mileage alone erases 30% to 50% of gross earnings.
Track from your first delivery. A mileage app works, and so does a dated odometer note at the start and end of each shift. Smaller deductions add to that: the insulated bag, phone mounts, the share of your phone plan used for deliveries, tolls, and parking while delivering.
What you owe on the profit
Earnings minus deductions is your profit. You owe income tax on it at your bracket plus about 15.3% self-employment tax, which starts at $400 of profit. A common all-in range is 20% to 30% of profit, so set that share of each week's payout aside. The 1099 tax calculator gives you your own number instead of the range.
Quarterly payments, or not
If you expect to owe $1,000 or more at filing time, the IRS wants four payments during the year, and skipping them adds an underpayment penalty. If you also work a W-2 job, your paycheck's withholding counts toward the test, and a small W-4 adjustment can cover the delivery income with no quarterly payments at all. Full-time drivers should read the self-employed guide for the whole calendar.
See what you owe on your delivery income
Enter your delivery profit, what's left after your mileage deduction, and get your set-aside percentage and quarterly payment, free.
Sources: IRS Gig Economy Tax Center · IRS Schedule C