Can I Get My Mileage From DoorDash? The Ultimate Dasher’s Tax Guide

No, DoorDash does not directly reimburse you for mileage. As an independent contractor, you are responsible for covering your vehicle expenses, including gas and mileage. However, you can deduct these expenses from your taxes. This is where understanding mileage tracking and IRS regulations becomes crucial for maximizing your earnings. Let’s dive deep into how you can leverage mileage deductions to your advantage.

Understanding the Dasher’s Mileage Situation

Being a DoorDash driver, or “Dasher,” offers flexibility and the chance to be your own boss. But with this independence comes the responsibility of managing your own finances, including your vehicle expenses. Unlike employees who might get reimbursed for mileage, Dashers are classified as independent contractors. This means DoorDash isn’t obligated to cover these costs directly.

The good news is that the IRS provides a way for self-employed individuals to recoup some of these costs through tax deductions. This is where accurate mileage tracking becomes your best friend.

Mastering Mileage Deductions: Your Key to Savings

The Standard Mileage Rate vs. Actual Expenses

The IRS allows two methods for deducting vehicle expenses:

• Standard Mileage Rate: This is a set rate per mile driven for business purposes, set annually by the IRS. For 2023, it was 65.5 cents per mile for business use. For 2024, it has been updated to 67 cents per mile. This rate covers gas, maintenance, depreciation, and other vehicle-related costs. This is the most common and often the simplest method for Dashers.
• Actual Expenses: This method involves tracking and deducting the actual expenses related to your vehicle, such as gas, oil changes, repairs, insurance, and depreciation. This method is more complex, requiring meticulous record-keeping. It might be beneficial if your actual expenses significantly exceed what you’d get with the standard mileage rate. Most Dashers find the standard mileage rate more advantageous.

What Mileage Can You Deduct as a Dasher?

Crucially, you can only deduct business mileage, not personal mileage. For a Dasher, this includes miles driven:

• From your starting point to the first restaurant pick-up.
• Between restaurant pick-ups and customer deliveries.
• From your last delivery back to a designated area where you typically wait for orders (if applicable).

You cannot deduct mileage for:

• Commuting from your home to your first pick-up location if that location is considered your regular place of business (which it typically isn’t for Dashers).
• Personal errands or trips.
• Driving back home at the end of your shift (if not driving directly to a designated waiting area).

The Importance of Accurate Mileage Tracking

The IRS requires you to keep detailed records of your business mileage. Acceptable forms of evidence include:

• Mileage logbook: A physical or digital notebook where you record each trip, including the date, starting and ending locations, and the purpose of the trip.
• Mileage tracking apps: These apps use GPS to automatically track your mileage and can generate reports for tax purposes. Popular options include Stride, Everlance, and MileIQ.
• Spreadsheets: Creating a spreadsheet to manually input your mileage data is another option, though it can be more time-consuming than using an app.

The best practice is to track your mileage in real-time. Relying on memory at the end of the day or week is prone to errors and could cost you money. Make sure your records are comprehensive, capturing the date, starting point, destination, and total miles driven for each delivery trip.

Claiming Your Mileage Deduction on Your Taxes

You’ll use Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship), to report your income and expenses as a DoorDash driver. The mileage deduction is claimed on Part II – Expenses. Make sure to keep your mileage records organized and readily available in case of an audit.

Remember, even if you don’t owe any taxes due to your deductions, you still need to file Schedule C to report your income and claim the deduction.

FAQs: Decoding DoorDash Mileage and Taxes

1. Can DoorDash provide me with a mileage report?

No, DoorDash does not provide a specific mileage report. While they may offer some data on deliveries, it is your responsibility to track and document your mileage for tax purposes.

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

If you don’t track your mileage, you won’t be able to claim the deduction, potentially missing out on significant tax savings. Consistent tracking is essential.

3. Can I deduct the cost of gas instead of mileage?

You can’t deduct both. If you use the standard mileage rate, the IRS considers the cost of gas already factored into the rate. If you use the actual expense method, you can deduct the actual cost of gas, along with other vehicle expenses. Choosing one or the other is important.

4. What if I drive a hybrid or electric vehicle?

The same rules apply. You can use either the standard mileage rate or the actual expense method, regardless of the type of vehicle you drive. No separate mileage rates for hybrid or electric.

5. Can I deduct the cost of car insurance?

If you use the standard mileage rate, the cost of car insurance is already factored into the rate. If you use the actual expense method, you can deduct the portion of your car insurance that is attributable to business use.

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

You can only deduct the portion of your mileage and expenses that are attributable to business use. You’ll need to keep detailed records to separate your business mileage from your personal mileage.

7. Is there a limit to how much mileage I can deduct?

No, there is no limit to the amount of business mileage you can deduct, as long as it is properly documented and legitimately incurred. Document, document, document!

8. Should I consult a tax professional?

It’s always a good idea to consult a qualified tax professional for personalized advice. Tax laws can be complex, and a professional can help you ensure you’re taking all the deductions you’re entitled to. Tax pros are worth their weight in gold!

9. What happens if I get audited by the IRS?

If you get audited, you’ll need to provide documentation to support your mileage deduction. This is why accurate and detailed record-keeping is so crucial. Proper records are your shield during an audit.

10. Can I deduct parking fees and tolls?

Yes, you can deduct parking fees and tolls that you incur while driving for business purposes. Keep receipts or records of these expenses. These add up!

11. What is considered “commuting” for a DoorDash driver?

This can be a tricky area. Generally, commuting is defined as driving from your home to your regular place of business and back. For Dashers, this means that your commute might be driving from your home to your general operating area, but if you drive immediately to pick-up your first order, the trip may be deductible. The IRS has complex regulations and may treat each situation differently. Consult a professional for clarification on your personal situation.

12. How does the DoorDash app itself factor into mileage tracking?

While the DoorDash app tracks your deliveries, it isn’t a substitute for accurate mileage tracking. The app’s mileage data may not be precise enough for IRS purposes, and it may not capture all deductible mileage, such as driving to your first pick-up point. Using a dedicated mileage tracking app or a detailed log is still recommended. Don’t rely solely on the DoorDash app.

Take Control of Your Dasher Finances

Understanding the intricacies of mileage deductions is vital for maximizing your income as a DoorDash driver. By diligently tracking your business mileage and following the IRS guidelines, you can significantly reduce your tax liability and boost your bottom line. Embrace these strategies, and you’ll be well on your way to becoming a financially savvy Dasher! Remember, this information is for general guidance only and is not professional tax advice. Consult with a qualified tax professional for personalized advice tailored to your specific situation.