Let's look at the example of a married person with $45,000 additional income and $15,000 delivery driver profits: Start with the total you came up with when multiplying your net profit by .735, then multiply that by your tax rate.Our hypothetical Dasher had $15,000 in self-employment income, with 73.5% of that equaling $11,025. Again, drivers arent obligated to deliver for only one company alone. So, in general, you can expect to pay taxes around 15.3% if you are working as a DoorDash. Youll also receive 100% of the tips customers leave for you. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. To maximize your earnings as a Dasher, its important to be strategic about the orders you accept. If you move into a higher tax bracket, that higher rate only applies to income over and above the threshold. These incremental rewards can add extra earnings between $1.27 and $1.69 per gallon for those who qualify**, on top of normal DoorDash pay, promotions, and tips. While DoorDash offers drivers the flexibility to choose their own hours and work as much or as little as they want, there are also potential downsides to the job, such as fuel costs and vehicle depreciation. This is an estimate to get you an idea. Those steps give you your business profit. What we CAN do is get a feel for how much more your taxes will be (or how much less you'll get as a refund) based on your business profits. There are a lot of details and rules about how that works. All Rights Reserved. This is because my other expenses pale in comparison. Choose your delivery times wisely. As a potential DoorDash driver, its important to understand the experiences of current and former drivers. For one thing, there might not be as many orders available, which means you might have to wait longer between deliveries. By December of 2018, DoorDash had surpassed Uber Eats and grabbed the USAs second position in total food delivery sales. Pros Nothing is set in stone for this gig economy job, but for a side hustle, the average hourly pay isnt too bad. Instead, they work on base pay per order. If you normally would have a $3,000 tax refund, a tax impact of $2,000 means you now only get $1,000 back. To view the purposes they believe they have legitimate interest for, or to object to this data processing use the vendor list link below. Its market share for delivery is currently over 50%. No Federal Income Tax Withheld from My Paycheck: 8 Reasons You Should Know, Deferred Tax Liability: Definition, Example, And Calculation, Deferred Tax Assets Definition, Example, and Why the Deferred Tax Asset Arises. It isn't your actual pay or hourly pay. This base pay is the DoorDash guaranteed minimum for payment. Well, DoorDash states the average hourly pay is $23 per hour, so you can earn more than minimum wage chances are with this side hustle. Learn more in our fullDoorDash Driver Review. Sky-high gas prices. What is a Field Auditor? The IRS isn't as crazy as you think. This is especially frustrating when you do not want to drive dead miles back to a hotspot, hoping that it will make a difference, or during the slow weekdays. Plan your delivery route to minimize your driving distance and time. It is important to know because the expenses have to be deducted from the total earnings to find the taxable income as a self-employed individual. Peak times on DoorDash are roughly aligned with meal times, from 11:00 a.m. to 2:00 p.m. and 4:30 p.m. to 8:00 p.m. By working during these times, you may be able to earn more money per delivery to even make $100 a day, if not more! Good tax professionals understand how it works for self-employed people and 1099 contract workers. Customers can browse menus and place orders through the DoorDash app or website.
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