Does DoorDash Track Miles for Taxes? A Dasher’s Guide to Mileage Tracking

The short answer is no, DoorDash does not automatically track your mileage for tax purposes. While the DoorDash app might provide some data on your active delivery time and earnings, it falls short of providing the detailed and IRS-compliant mileage log you need to claim the mileage deduction on your taxes.

Why DoorDash Doesn’t Do the Heavy Lifting (And Why You Need To)

Think of DoorDash as your partner in connecting you with hungry customers, not your personal tax accountant. While they give you the platform to earn, you’re ultimately responsible for tracking your business expenses, including those crucial miles. Relying solely on DoorDash’s information for tax purposes is a recipe for disaster, potentially leading to an understated deduction and an increased tax bill. The IRS requires meticulous records, and DoorDash simply doesn’t provide them.

Consider this: the mileage deduction covers not just the miles driven while actively delivering food, but also miles driven while heading to your “hotspot,” waiting for orders, and even driving back home after your shift. DoorDash doesn’t track these crucial components of your business mileage.

The Importance of Accurate Mileage Tracking

For DoorDash drivers, mileage is often the largest deductible expense. Accurately tracking it can significantly reduce your taxable income and, consequently, your self-employment tax. We’re talking about potentially hundreds, even thousands, of dollars saved! But remember, the burden of proof lies with you. In the event of an audit, you’ll need to provide a detailed mileage log that substantiates your deduction. A guesstimate simply won’t cut it.

Methods for Tracking Your Mileage

So, how do you keep track of those valuable miles? Here are a few tried-and-true methods:

The Classic Notebook and Pen

The most basic, yet surprisingly effective, method involves maintaining a dedicated mileage log in a notebook. For each trip, record the date, starting location, ending location, and the total miles driven. While simple, this method requires discipline and consistency. Remember to note the purpose of each trip – picking up an order, delivering to a customer, etc.

Spreadsheet Savvy

If you’re comfortable with spreadsheets, you can create your own mileage tracking system using programs like Excel or Google Sheets. This allows for easy calculation and organization. You can customize the columns to include all the necessary information, such as date, time, destination, purpose, starting odometer reading, and ending odometer reading.

Mileage Tracking Apps: The Modern Solution

The most convenient and accurate method involves using a dedicated mileage tracking app. These apps automatically track your miles using GPS, categorize trips as business or personal, and generate IRS-compliant reports. Popular options include:

• Stride Tax: Specifically designed for independent contractors, Stride Tax automatically tracks your miles, helps you estimate your taxes, and provides other helpful resources.
• Everlance: A robust app that tracks mileage, expenses, and income. It offers advanced features like automatic trip detection and custom report generation.
• MileIQ: A simple and user-friendly app that automatically tracks your miles in the background.
• TripLog: A comprehensive mileage and expense tracking app with features like automatic trip logging, vehicle expense tracking, and team management.

Pro Tip: Start tracking your mileage from day one! Don’t wait until tax season to scramble and reconstruct your records.

Establishing a Strong Paper Trail

Remember, meticulous record-keeping is key. Whatever method you choose, ensure you have the following information for each business trip:

• Date
• Starting Point
• Ending Point
• Purpose of the Trip (e.g., picking up food at restaurant X, delivering to customer Y)
• Miles Driven
• Odometer Readings (at the beginning and end of the year, and for each trip if possible)

Frequently Asked Questions (FAQs) for DoorDash Drivers

Here are some common questions that DoorDash drivers have about mileage tracking and taxes:

1. What is the standard mileage rate for 2024?

The IRS standard mileage rate for business use is 67 cents per mile for 2024. This rate is subject to change each year, so it’s crucial to stay updated.

2. Can I deduct other expenses besides mileage?

Yes! You can also deduct expenses like hot bags, car washes (if business-related), phone mounts, and a portion of your cell phone bill if you use your phone primarily for DoorDash. Keep detailed records and receipts for all expenses.

3. How do I calculate my mileage deduction?

Multiply your total business miles for the year by the standard mileage rate (67 cents per mile for 2024). The result is the amount you can deduct.

4. What happens if I don’t track my mileage accurately?

Inaccurate mileage tracking can lead to an understated deduction, which means you’ll pay more in taxes. In the event of an audit, you could face penalties and interest if you can’t substantiate your deduction.

5. Can I deduct the actual expenses of my car instead of taking the standard mileage deduction?

Yes, but this method is more complex. You can deduct the actual costs of operating your vehicle, such as gas, oil changes, repairs, insurance, and depreciation. However, you’ll need to keep meticulous records of all these expenses, and it may not always result in a larger deduction than the standard mileage rate. You must choose either the standard mileage rate or actual expenses and stick with that method for the life of the vehicle.

6. What constitutes “business miles” for DoorDash?

Business miles include miles driven:

• From your home to your first delivery location
• Between delivery locations
• From your last delivery location back home
• While driving to a “hotspot” to wait for orders

7. What if I use my car for both personal and business use?

You can only deduct the portion of expenses that relates to business use. For example, if you use your car 60% of the time for DoorDash and 40% of the time for personal use, you can only deduct 60% of your car-related expenses.

8. How do I handle tolls and parking fees?

You can deduct tolls and parking fees as separate expenses, in addition to the mileage deduction. Make sure to keep receipts.

9. Do I need to report my DoorDash earnings to the IRS?

Yes, absolutely. As an independent contractor, you’ll receive a Form 1099-NEC from DoorDash if you earn $600 or more during the tax year. You must report this income on Schedule C of your tax return.

10. What is self-employment tax?

As an independent contractor, you’re responsible for paying both the employer and employee portions of Social Security and Medicare taxes. This is called self-employment tax. Fortunately, you can deduct one-half of your self-employment tax from your gross income.

11. Should I hire a tax professional?

If you’re unsure about how to handle your taxes as a DoorDash driver, it’s always a good idea to consult with a qualified tax professional. They can provide personalized advice and help you maximize your deductions.

12. Are there any other tax deductions specific to DoorDash drivers?

Besides mileage and car expenses, you may be able to deduct expenses such as:

• Hot bags and insulated containers
• Hand sanitizer and cleaning supplies (especially relevant in recent years)
• Phone mounts and chargers
• A portion of your cell phone bill
• Fees paid for background checks or other onboarding requirements

Remember to keep accurate records and consult with a tax professional to ensure you’re taking all the deductions you’re entitled to.

In conclusion, while DoorDash provides a valuable platform for earning income, it’s your responsibility to accurately track your mileage and other business expenses for tax purposes. By using one of the methods described above and keeping detailed records, you can maximize your deductions and minimize your tax liability. Happy dashing (and tax-saving)!