It’s highly probable that you’ve already signed up for DoorDash and started your new side business while reading this tutorial. As a delivery driver, it’s essential to understand tax regulations and how to maximize revenue from each delivery. Working for yourself means running your own small business, which can be an exciting experience. You can listen to music while driving without worrying about someone watching you, as you never know where you’ll end up next. You can earn a significant amount of money with DoorDash by knowing all the insider information, whether you work part-time as a side hustler or full-time as an independent contractor.
However, having more freedom also means having more responsibilities and tax obligations. Keeping track of expenses and knowing when your quarterly taxes are due are just a few of the steps involved in figuring out your DoorDash 1099 taxes. If you’re not sure what to do, the IRS could come knocking on your door. Whether you work as a full-time or part-time DoorDash driver, it’s crucial to file your taxes accurately. This tutorial will guide you through everything you need to know about taxes for DoorDash, including how and when to file them and what tax deductions you’re eligible for.
What is DoorDash in Canada?
DoorDash is a popular meal delivery app that allows you to order food online and have it delivered directly to your doorstep in Canada, the US, and Australia. With over 300,000 regional and chain restaurants available, you can order from a variety of cuisines such as Mexican, Chinese, Indian, Asian, Italian, and more. DoorDash’s competitors in Canada include GrubHub, SkipTheDishes, and UberEats.
Do I need to pay taxes if I work for DoorDash?
Yes, you’ll be required to pay taxes just like everyone else. If your income from working with DoorDash exceeds $600, you must pay taxes. It’s not just DoorDash employees who are subject to this. You may have taken on some side work to make up for lost income, and taxes will be owed on the money you make. This money will be subject to income tax at your standard rate.
In addition, you’ll also have to pay self-employment tax. This tax of 15.3% is imposed to cover Social Security and Medicare obligations, which are typically split between traditional employees and their employers. However, when you’re your own boss, you’re responsible for these costs. Fortunately, there’s some good news too. You may be able to deduct a portion of the self-employment tax on your annual tax return.
How Much Do DoorDash Drivers Earn?
DoorDash drivers earn a base rate of $2 to $10+ for each delivery, depending on factors such as projected time, distance, and order demand. They also receive the entire delivery fee and any customer tips.
In Ontario, the average hourly wage for DoorDash delivery drivers is $24.70, although actual earnings depend on the orders they accept, customer tips, and other variables.
How to Boost Your DoorDash Earnings
DoorDash offers various promotions that provide drivers with the opportunity to increase their earnings. Some of these promotions include Peak Pay, Challenges, and Guaranteed Earnings.
Peak Pay: During busy times, drivers can earn more money with Peak Pay, which is added to their total earnings when they accept deliveries.
Challenges: These are bonuses that reward drivers with extra pay when they complete a specific number of deliveries within a given timeframe.
Guaranteed Earnings: This is an incentive program that pays eligible drivers a certain amount of money (excluding tips) if they earn at least a specified amount within a particular number of days. DoorDash sends these offers to drivers via email or text message.
In Conclusion,
This blog has provided you with comprehensive information on Doordash taxes, including the process of submitting them and the tax deductions that you are eligible for. DoorDash is a well-known food delivery app that allows you to order food online and have it delivered straight to your door in Canada, the US, and Australia. Excessive trading on DoorDash can result in tax consequences for Canadian users. While the average hourly wage for DoorDash drivers in Ontario is $24.70, their exact earnings depend on various factors such as the orders they accept and client tips. As a self-employed worker, you will be subject to a 15.3% tax to cover Social Security and Medicare obligations, which would typically be shared between traditional employees and their employers. Now that you have learned about Doordash taxes, why not order some food for yourself?