Most Doordash delivery contractors use their personal vehicle to deliver meals and merchandise. Those who do can get a significant tax write-off from tracking and deducting car expenses on their tax return.
Unfortunately, too many people either don't know they can write off their vehicle expenses or mistakenly believe they can't do so. That mistake can cost hundreds or thousands of dollars on your tax bill.
How do you figure out what you can legally deduct? How do you avoid getting in trouble from going overboard?
We'll talk about writing off car expenses for Doordash and other platforms. We'll discuss:
- Why every Dasher who uses their car for deliveries can write off car expenses (even if they take the standard tax deduction)
- The choice the IRS gives you about HOW to claim car expenses
- Is it better to write off your Doordash mileage or actual expenses?
- What can you write off with the actual expense method?
- Why you absolutely MUST track your business miles for Doordash
- What miles can you track for Doordash?
- How to keep track of your mileage for Doordash and others
- Special car expenses you can write off even if you take the standard mileage allowance.
- How do you claim expenses for bikes, motorcycles, scooters, etc.?
- How to claim Doordash car expenses on your tax forms.
- Frequently Asked Questions about the Doordash mileage deduction and car expenses
About this article
This article aims to explain how Doordash delivery drivers can write off their car expenses. It's one of several articles in our series abouthow to pay Doordash taxesin the United States. We'll link to other articles where appropriate, and you can view the entire list of the Doordash tax series posts here.
This is not tax advice, and you should not take it as such. We intend to educate and explain how taxes work for Dashers and other gig workers. We only discuss U.S. taxes in this article. You should seek a tax professional who can guide you in your specific situation and understands your local and national tax rules.
Why every Dasher who uses their car for deliveries can write off car expenses (even if they take the standard tax deduction).
The most expensive tax mistake a Doordash contractor can make is to believe they can't claim their expenses or write off their vehicle costs. It happens because they confuse business expenses with tax deductions.
Here's what's behind that mistake: The IRS lets you write off personal tax deductions. You can either list them all out or take a flat Standard deduction of $13,850 (or $27,700 for married filers). The standard deduction is easier, with no questions asked, and you can take it whether you have any real deductions.
However, if you take the standard tax deduction, you can't claim any itemizable deductions on top of that. This creates confusion for independent contractors who think that your car and business expenses fit within that standard personal tax deduction.
However, your Doordash expenses are different. They aren't tax deductions. We write them off differently because they're business expenses.
As an independent contractor, you provide delivery services as a business, not as an employee. You are self-employed as a Dasher and technically running a business. This makes you a small business owner, with your Doordash taxes being business taxes.
This is important to understand because of what your Doordash taxes are based on. Self-employed individuals do not pay taxes on how much money is received for services. Your tax bill is based on your profits or what's left over after expenses.
You write off your expenses as part of determining taxable income as a Doordash contractor. This means that writing off your car business mileage or expenses happens in a different place on your tax return than your personal tax deductions.
That reality allows you to claim your Doordash business expenses regardless of whether you itemize or take the standard deduction.
The choice the IRS gives you about HOW to claim car expenses.
Like they do with the itemized versus standard tax deduction, the IRS gives you two choices regarding writing off your Doordash car expenses. You can track all the actual car expenses or write off a flat rate per mile driven
You can choose between the two. This means you can not claim miles and then also write off car-related expenses on top of that. It's one or the other, not both.
With theStandard Mileage Rate method,you total how many business miles you drove while delivering in the calendar year. Next, multiply those business miles by the mileage rate for that year.For the 2023 tax year, you can write off 65.5cents per mile.
You don't have to take the mileage allowance. If your actual cost of driving is greater than the mileage allowance, you can use the actual expense method and claim the business portion of your total cost of driving. For that, you determine what percentage of total miles were for business. Then, multiply that by the total cost of operating your car to determine your vehicle write-off.
Is it better to write off your Doordash mileage or actual expenses?
That depends on your particular expenses. It's a good practice to track mileage and actual costs to determine which method is best for you.
In fact, if you use the actual expense method, you will still need to track your miles to know what percentage was for business.
Most gig workers are better off deducting miles. The standard rate is pretty generous, especially if you have an older or less valuable vehicle.
If your car is relatively new or valuable, you may find that the actual expense method is better for you. Part of that method includes depreciation, calculated as a percentage of the purchase price. On higher-value cars, depreciation often sways things in favor of claiming the total cost of operation.
The IRS has several rules about which method you use. For example, you can never use the standard mileage method if you wrote off your total vehicle costs in the first year of business use.
It would be beneficial to visit your tax professional for guidance about which method works best for your situation.
What can you write off with the actual expense method?
The IRS lists several items you would use to calculate the cost of operating your car. They include:
- Depreciation if you purchased or financed your car
- Lease payments (if you lease)
- Registration and licensing fees
- Insurance
- Repairs, oil changes, and other maintenance costs
- Tires and other replacement parts
- Day-to-day parking and tolls.
Add up the total spent on each of these items. Multiply that by the business percentage of miles you drove. If 80% of your miles were business-related, you could write off 80% of your vehicle costs.
There are a lot of details and rules about how that works. You can read more abouthow the actual expense method works for Dashers.
Why you absolutely MUST track your business miles for Doordash
When you write off your Doordash car costs, the IRS will ask you two questions:
- Do you have evidence of your deduction?
- Is the evidence written?
You must be able to answer “yes” to both questions to write off your car expenses. Therefore, having a log of the miles you drive for Doordash is critical.
Even if you choose the actual expense method, you need to know how many miles you drove for business. That total number of miles is necessary for calculating the business percentage.
What miles can you track for Doordash?
The easiest way to determine if a mile driven is for business is whether you are logged into the Dasher app (or other apps) with the intent to accept reasonable offers.
You may claim miles driven to the restaurant or miles driven between deliveries. You are not restricted to times when food or merchandise is in your car.
We go into much more detail about the miles you can claim with Doordash in this part of our Doordash Taxes series.
How to track Doordash miles
The IRS requires a written daily log of your miles driven. That mileage log must include:
- The date
- Where you went
- The business purpose of your trip
- The number of miles driven.
There are two ways you can do this:
- Manually record your odometer readings at the start and end of each trip. You can do this on a written log or track it with a spreadsheet on your phone.
- Use a GPS mileage tracking app like Hurdlr. There are several different apps. Some are free with limited features, and others have a subscription cost.
You can read more about mileage tracking for Dashers including how to track miles, what miles you can track, and what to do if you forgot to track your miles.
Special car expenses you can write off even if you take the standard mileage deduction.
Three expense items are related to driving that you can write off, regardless of which expense method you choose.
- The business percentage of interest on your car loan
- The business percentage of your car's property taxes
- Tolls and parking fees incurred while delivering for Doordash (and other apps)
We write more about how Dashers can claim their car interest, property tax, parking, and tolls. There we show what the IRS has to say about these deductions. We also detail why they can be claimed on top of the mileage allowance.
How do you claim expenses for bikes, motorcycles, scooters, etc.?
The standard mileage allowance is only available for cars that meet the IRS definition of a car. Two-wheel vehicles, such as e-bikes, motorcycles, and scooters, do not meet the criteria.
In other words, you can not write off mileage for bikes, motorbikes, or scooters.
The good news is that you can claim the business portion of these expenses. As you do with a car, determine what percent of riding is for business, and claim that percentage of total costs related to the vehicle.
We write more detail here about how to claim your bike, motorcycle, or scooter expenses for Doordash.
How to claim Doordash car expenses on your tax form.
You will fill out the IRS form Schedule C Doordash drivers and other independent contractors submit. It's entitled “Profit and loss from business.” There, you listincome from your Doordash tax form (1099-NEC). Also, add earnings from other gig economy companies, then subtract your expenses and tax write offs for Doordash to determine net profit.
The expense section of Schedule C includes several expense categories that Dashers can fill out. Total what you spent in each category and list those totals on the form.
The section where you claim your miles or actual expenses isLine 9: Car and Truck expenses. Calculate your vehicle expense write-off (whether using miles or actual expenses) and enter that total on line 9. If you had parking or tolls during your deliveries, add those payments to your Line 9 total.
The IRS wants more detail about your driving and your car. They will ask you when you first used your car for business. They'll also ask how many miles you drove for business, commuting, and other purposes.
In the end, you'll be asked if you have evidence of your deduction and if it's written. You do not submit that evidence with your tax form, but you should keep it available.
Once you've done that, you continue filling out your Schedule C. Once you've determined your profit, add that number to any other income you have on your 1040 and complete your Doordash income tax form.
Finally, your Doordash profit also determines your Self-Employment taxes. We talk more here about if Doordash is subject to self-employment taxes and how it all works.
A Dasher who drives a mile for each dollar earned can write off nearly 60% of their Doordash income. You can see why it's so important to pay attention to your mileage deduction or car expense write-offs.
Frequently Asked Questions (FAQ's) about car write-offs and mileage for Doordash drivers
Can I claim my Doordash miles on one car and actual expenses on another?
Yes. You can decide on a vehicle-by-vehicle basis whether to claim mileage or actual expenses. You should track your expenses and mileage separately if you use more than one vehicle for Doordash.
Can I write off mileage and gas for Doordash?
You can not claim both. Gas is part of the actual expense of operating a car. The standard mileage allowance is an alternative to claiming the actual costs of your vehicle, meaning you have to choose one or the other.
Can I write off a new car for Doordash?
You can not write off the purchase of your new car regardless of whether you claim miles or actual expenses. The IRS calls a car purchase a “capital expense.” A car is an asset and is treated as another form of money. Thus buying a car is simply trading one asset for another. The alternative is to write off the vehicle's depreciation.
Can I write off my car payment for Doordash?
You can not write off your car payment for two reasons. First, a car is a capital purchase and can not be claimed as an expense. Second, a payment only pays down a loan and isn't considered an expense. You can, however, write off part of the interest. You can read more about writing off car payments for Doordash.
Why can I write off my lease payment for Doordash but not my car payment?
A car payment is a capital expenditure and can not be claimed as an expense. With a lease, you are paying for using an asset (the car) and never actually taking ownership of the vehicle. Thus the entire payment amount is a deductible expense (but only if using the actual expense method).
Can I write off my car washes for Doordash?
You can only write off car washes if using the actual expense method.The IRS sent a notice to tax volunteersthat states, “There is no authority that would allow a taxpayer claiming the standard mileage rate to also deduct the expense of car washes as they would tolls and parking.”
Do I have to have odometer readings for my mileage log with Doordash?
The IRS does not specifically require odometer readings for your mileage log. They also allow GPS mileage logs, which typically do not include odometer readings. However, odometer readings are a good way of adding legitimacy to your mileage log if tracked manually.
Can I claim miles if I Doordash in my friend or family member's car?
No. You must own the vehicle or have a lease agreement to claim the standard mileage allowance. The mileage allowance is intended to cover the total cost of ownership, and you do not pay for those costs when using someone else's vehicle. You can write off the business portion of out-of-pocket expenses related to using the car. Those costs can include any reimbursem*nt you provide for the use of the vehicle.
Does Doordash report my miles?
Doordash does not report miles to the IRS for you. It is your responsibility to record and document your own mileage and expenses.
Does Doordash keep track of mileage for taxes?
Doordash does not track miles for tax purposes. They do keep a record of estimated mileage. There are two reasons you should not rely on Doordash's estimate. First, it is only an estimate and does not capture all the miles you drive for your business. Second, their estimate does not include a daily total and thus is not IRS-compliant. You can read more here about Does Doordash keep track of your miles.
How do I get my Doordash mileage?
Doordash sends an email with your total estimated miles for the previous year. That estimate is typically sent around the end of February. You can not obtain that report other than in that email. Remember that it is only an estimate and not in an IRS-compliant format.
What happens if I don't have a mileage log for Doordash?
When you write off your mileage or vehicle expenses, you must certify to the IRS that you have written evidence to support your deduction. An auditor may disallow the entire vehicle deduction if you do not have such documentation.
What if I forgot to track my Doordash miles?
You may be able to retroactively create a written log if you have evidence to support your record. You must provide a written statement explaining how you determined the mileage. You can read more about what to do if you forgot to track miles for Doordash.
Can I guess how many miles I drove for Doordash?
No. The IRS requires that you have written evidence to support your deduction. There may be situations where you can estimate miles based on other available evidence, but a guess will never be accepted.
Is there a limit to the miles I can write off for Doordash?
The IRS does not cap the number of miles you can write off. This is good news when gig workers often put tens of thousands of miles on their cars. However, an extremely high number of miles can be a red flag that could trigger an audit. In the end, if your mileage claim is legitimate and well documented, you should not have an issue.
How do I report mileage on my taxes?
Your mileage is reported on line 9 of Schedule C. We wrote about this in more detail earlier in this article.
