9 Best Tax Deductions for Doordash Drivers in 2024 | Everlance (2024)

When it comes to filing your Doordash taxes, you want to be saving as much as possible, right?

So, what deductions can you claim for Doordash?

1. Mileage or Car Expenses

One of the best tax deductions for Doordash drivers—or any self-employed individuals—is deducting your business mileage. This is more than just the miles while your on deliveries, it also includes the miles between deliveries, running errands related to your business, and driving from delivery zone to delivery zone. This does not include your commuting mileage, which is not tax deductible. For most Dashers, that means their drive from the front door to the first pickup, and the last drop off back home. Alternatively, you can keep track of your vehicle expenses and deduct those from your taxes instead.

Keep in mind that you can’t deduct both car expenses and mileage at the same time! The IRS standard deduction rate for mileage is estimated as the average cost to use your car for work purposes. You can either deduct the standard mileage rate—currently $0.67 cents per mile in 2024 —or you can itemize and deduct all of your car expenses.

What kinds of car expenses could you deduct?

• Gas costs
• Car maintenance
• Car payments
• Oil changes
  
• Depreciation
• Tires
• Insurance and registration fees

If you drive the same vehicle for both personal and work trips, you can only deduct the cost of the expenses for the percentage of time you’re driving the car for work. For example, if you drive your car 30% of the time for work and 70% of the time for personal use, you can only deduct 30% of your overall vehicle expenses on your taxes.

The IRS verifies the percentage of your work-related driving based on a mileage log (that you’ll need to keep up throughout the year) to see the percentage of work-related mileage vs. total mileage on the vehicle.

FYI: Using the mileage deduction usually means you can deduct more from your business income than you would if you had deducted all of your individual car expenses. When you use the standard mileage deduction, you also don’t have to keep track of gas and maintenance receipts in addition to your mileage log. The standard mileage rate applies to both gas powered and electric powered vehicles as well.

With either deduction approach, you do need to keep an accurate record of the mileage you drive for work. A mileage tracker for DoorDash Dashers like Everlance, can help you track mileage easily and automatically and make sure you’re not missing out on any deductions

2. Phone & Service Bills

As a Doordash driver, you can’t do your job without a phone, lots of data, and some basic accessories.

For example, a car charger and phone mount are essential as a Dasher and thus are reasonable tax deductions for Doordash drivers. But be careful—if you use these accessories for both work and personal use, you can only deduct the “work percentage.”

For example, if you use your phone for personal use 70% of the time, and work 30% of the time, you’d only be able to deduct 30% of your phone and related expenses.

Of course, it might be difficult to estimate how much of your phone usage is for work. We recommend going through your phone records for a normal month and look at how much of your data/phone calls or usage occurs during your work shifts and apply the average to the rest of the year.

You can also use the Screen Time feature on iPhone to see the amount of time spent on work apps, like Doordash, vs. your personal apps.

3. Hot bags, blankets & Courier backpacks

Another great tax deduction for Doordash drivers includes any hot bags, blankets or other gear you use for your deliveries. You know those insulated bags and blankets that you use to keep food orders nice and warm? Yep! They are deductible as a business expense.

Again, just be sure these are items you use for work purposes only if you’re going to deduct them from your taxes.

4. Tolls

Toll fees that you pay while you drive for Doordash are tax-deductible! Just make sure that they're not already being reimbursed to you by Doordash.

5. Parking

Sometimes it’s difficult to find a place to park, especially if you drive in the city. Any parking you pay for while driving for Doordash is tax-deductible.

Don’t push it, though: Parking tickets (along with other traffic violations, speeding tickets, and so on) are not deductible, as these occurred because of inappropriate driving and not directly because of work.

6. Inspections

Does your delivery job require you to pay for a background check, a vehicle inspection, or something similar? These are tax-deductible as long as they’re required for your work.

7. Roadside Assistance

Fees for AAA or other roadside assistance programs are tax-deductible based on the percentage of this service that you use for work.

For example, if you use your subscription four times a year for work, and twice while you’re driving for personal reasons, be sure to only deduct the portion of the expense that covered you for work.

8. Health Insurance

Pay for your own health insurance?The cost of your health insurance premiums can be a tax deduction for Doordash drivers, or anyone who is self-employed, as long as you meet a few requirements. You can read more about the IRS requirements here.

9. Tools and Services

Tools or services that you use for business purposes are tax-deductible.

For example, Everlance Premium is 100% tax-deductible. If you have other apps, tools or services that are either a one-time fee or require an annual subscription that you use for your business, these are also tax-deductible.

Dashers get 20%off their first year of Everlance Premium so download now and start tracking your mileage and business expenses automatically -- and save money and time on your taxes!

How to Keep Track of Your Deductions

Keeping accurate records of your deductions is crucial to maximizing tax savings as a Dasher. A mileage and expense tracking app like Everlance makes it easy to automatically log deductible miles driven and other expenses. Be sure to categorize expenses appropriately and keep personal versus business spending separate. Save all receipts, organize them by date and expense type, or snap a picture and just upload it into your app. Review your records regularly to ensure nothing is missing. Detailed documentation will help support your deductions if audited.

How to Claim Your Deductions

When tax time comes, be sure to claim all eligible deductions on the proper IRS forms and schedules. Report your business mileage deduction on Form 1040 Schedule C, applying the standard mileage rate or your actual vehicle expenses. Enter qualifying business expenses on Schedule C as well, categorizing each appropriately. Use Form 4562 to calculate depreciation deductions on assets like your car or phone. Consult IRS guidelines to ensure deduction amounts and categories are accurate. Consider working with a tax professional to maximize savings through optimal deduction strategies. Maintain your documentation for at least 3 years in case of an audit. Thorough records will validate the deductions you claim.

Remember, Always Do Your Research!

Filing taxes as an independent contractor can be stressful and time-consuming, but if you have a clear idea of what items are tax-deductible, it will make tax season that much easier for you.

We compiled this list of popular deductions for Dashers, but we highly recommend that you still run everything by a tax professional.