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Does DoorDash Track Mileage for Taxes? A Dasher’s Definitive Guide

The short answer is yes, DoorDash does track your mileage, but it’s crucial to understand how they do it and why you can’t rely solely on their numbers for tax purposes. Their in-app mileage tracker gives you a basic estimate, but mastering mileage tracking is your secret weapon to minimizing your tax bill as an independent contractor.

Understanding DoorDash Mileage Tracking

DoorDash provides a mileage tracking feature within the Dasher app. This feature is intended to help you estimate the miles you’ve driven while on active deliveries. It’s important to grasp that the keyword here is active.

What “Active Delivery” Means

“Active delivery” typically refers to the time from when you accept an order until you complete the delivery. The DoorDash app then tracks the distance between the restaurant and the customer. This is where the core of their mileage tracking lies.

The Limitations of DoorDash’s Mileage Tracking

Now, here’s the kicker: relying solely on DoorDash’s mileage tracking is a tax disaster waiting to happen. Why? Because it doesn’t account for several crucial categories of deductible miles. The IRS allows deductions for all business miles driven, including:

Miles driven from your home to your first delivery.
Miles driven between deliveries (while still logged in and available to accept orders).
Miles driven back home at the end of your shift.
Miles driven to pick up supplies related to your delivery work (e.g., insulated bags).

DoorDash’s tracker usually only covers the distance between order pickup and customer drop-off, severely underrepresenting your total deductible mileage.

Why Accurate Mileage Tracking Matters

As a DoorDash driver, you are considered an independent contractor. This means you are responsible for paying your own self-employment taxes, which can be significant. The good news is that the IRS offers a substantial deduction for business-related mileage, which can directly lower your taxable income. For 2023, the standard mileage rate was 65.5 cents per mile. This translates into a significant tax saving with accurate mileage tracking.

The Power of the Mileage Deduction

Imagine you drive 10,000 miles for DoorDash in a year and are in a 22% tax bracket. Using the 2023 standard mileage rate, your mileage deduction would be $6,550 (10,000 miles x $0.655). In this case, deducting that amount would save you $1,441 in taxes ($6,550 x 0.22). Ignoring deductible miles would result in you significantly overpaying your taxes.

Keeping Accurate Records: The Key to Tax Success

The IRS requires meticulous records to substantiate your mileage deduction. This means having a log that includes the date, purpose, and miles driven for each trip. Relying on DoorDash’s incomplete tracking can trigger red flags during an audit.

Reliable Mileage Tracking Methods for Dashers

Several superior methods are available to ensure accurate mileage tracking:

Dedicated Mileage Tracking Apps: Apps like Stride, Everlance, MileIQ, and TripLog are designed specifically for tracking business mileage. These apps often automatically track your trips via GPS, categorize them, and generate reports suitable for tax filing.
Spreadsheets: While manual, a spreadsheet can effectively track your mileage. Create columns for the date, purpose of the trip (e.g., “Home to hotspot,” “Delivery to customer”), starting location, ending location, and mileage.
Paper Log: A physical mileage logbook works too! Just make sure to diligently record all the required information.

Pro Tip: Consider using a combination of methods as a fail-safe. For instance, use a mileage tracking app as your primary method and a paper log as a backup.

What Should a Mileage Log Include?

Regardless of the method you choose, your mileage log must contain the following information:

Date of the trip
Starting location
Ending location
Purpose of the trip (be specific)
Miles driven

Note: The IRS can ask for these records in the event of an audit. So, keep them organized and accurate.

Frequently Asked Questions (FAQs) About DoorDash Mileage and Taxes

Here are 12 frequently asked questions to shed more light on this important topic:

1. Can I deduct expenses other than mileage?

Yes, you can deduct other business expenses besides mileage, such as the cost of your insulated bags, phone mounts, and even a portion of your cell phone bill (the percentage you use for business). Keep detailed records and consult with a tax professional.

2. How do I know if I should use the standard mileage rate or actual expenses?

The standard mileage rate is simpler, while the actual expense method involves tracking all your vehicle-related expenses (gas, insurance, repairs, depreciation, etc.) and deducting the business portion. You must choose one method and stick with it for a specific vehicle. Consult a tax professional to determine which method is most beneficial for you.

3. What if I forget to track my mileage for a day?

Do your best to reconstruct your route and estimate the mileage as accurately as possible. Use Google Maps or similar tools to help. Document your estimation process in case of an audit.

4. How long should I keep my mileage records?

The IRS recommends keeping your tax records, including mileage logs, for at least three years from the date you filed your return or two years from the date you paid the tax, whichever is later.

5. What happens if I get audited and my mileage log is inaccurate?

If your mileage log is inaccurate or incomplete, the IRS may disallow your mileage deduction. This can result in additional taxes, penalties, and interest.

6. Can I deduct mileage for driving to a mechanic for car repairs?

Yes, if the car repairs are directly related to your DoorDash work, you can deduct the mileage for driving to and from the mechanic.

7. Are there any apps that integrate with my DoorDash account for mileage tracking?

Some mileage tracking apps like Stride have partnered with DoorDash and can automatically import your earnings data, making tax preparation even easier.

8. Can I deduct the cost of parking fees and tolls?

Yes, parking fees and tolls directly related to your DoorDash deliveries are deductible business expenses. Keep receipts!

9. What about mileage driven for personal errands while dashing?

You can only deduct the miles driven specifically for business purposes. If you run personal errands while dashing, you need to separate out those personal miles from your business miles.

10. Can I deduct mileage even if I lease my car?

Yes, you can deduct mileage whether you own or lease your car. If you lease, be aware of potential limits on the actual expenses method.

11. What if I use my bike or scooter for DoorDash deliveries?

The same principles apply. Track your business mileage using an app, spreadsheet, or paper log. You can also deduct expenses related to your bike or scooter, such as repairs and maintenance.

12. Where can I find the standard mileage rate for each year?

The IRS announces the standard mileage rate annually. You can find the current and past rates on the IRS website (irs.gov). Make sure you use the correct rate for the year you’re filing taxes for.

Final Thoughts: Take Control of Your Tax Obligations

While DoorDash’s mileage tracking is a useful starting point, don’t rely on it as your sole source of information for tax purposes. Embrace a robust mileage tracking method, maintain detailed records, and consider consulting with a tax professional to maximize your deductions and minimize your tax liability as a DoorDash driver. Remember, accurate mileage tracking is your pathway to a smoother and less stressful tax season.