If you make money driving for DoorDash, Uber, Instacart, or another gig app, you may be wondering whether you have to pay taxes on that income.
In most cases, yes, gig work income is taxable. Even if driving is only a side job or you never receive a tax form, you generally still need to report taxable income on your tax return.
The good news is that if you are considered self-employed, you may also be able to deduct certain business expenses related to your work.
Gig Work Income Usually Needs to Be Reported
Money you earn from delivering food, transporting passengers, shopping for customers, or performing other gig work generally counts as income.
This can include money earned through apps such as DoorDash, Uber, and Instacart.
It doesn’t necessarily matter whether you work every day or only occasionally. If you earn taxable income through gig work, you generally need to include it when preparing your tax return.
Keeping track of everything you earn during the year can make tax time much easier.
What If I Don’t Receive a 1099?
You may receive a 1099 showing some or all of the money you earned through a gig platform.
But what happens if you don’t receive one?
Not receiving a 1099 does not automatically mean you can leave the income off your tax return. Taxable gig income generally still needs to be reported.
Your own records are important. Keep track of your earnings throughout the year instead of relying only on the tax forms you receive.
Can I Deduct My Mileage and Car Expenses?
If you use your vehicle for gig work, you may be able to deduct eligible business vehicle expenses.
Depending on your situation and the method you use, this may include business mileage or the business portion of certain vehicle expenses.
You may also have other eligible business expenses related to your gig work.
However, personal driving is different from business driving. That’s why keeping accurate mileage and expense records is important.
Save your receipts and consider keeping a mileage log throughout the year rather than trying to remember all your trips at tax time.
Why Aren’t Taxes Taken Out of My Pay?
Many gig workers are treated as independent contractors rather than traditional employees.
With a regular W-2 job, an employer usually withholds taxes from your paycheck. With independent contractor work, taxes may not automatically be taken out of your payments.
That means you may be responsible for paying income taxes and self-employment taxes yourself. Depending on how much you earn and your overall tax situation, you may also need to make estimated tax payments during the year.
This can surprise new gig workers who see money coming into their account without realizing they may need to set some aside for taxes.
Local Tax Can Help Gig Workers With Their Taxes
Taxes can get confusing when you drive for DoorDash, Uber, Instacart, or several apps at the same time.
Local Tax can help you understand your gig income, 1099 forms, mileage, business expenses, and other tax information.
We can help you determine what income needs to be reported, review potential business deductions, and prepare your tax return correctly.
Whether gig work is your main source of income or something you do for extra money, keeping good records throughout the year can make preparing your taxes much easier.
Local Tax
9429 Somerset Blvd
Bellflower, CA 90706
(562) 925-2203
Contact Local Tax if you need help preparing taxes for DoorDash, Uber, Instacart, or other gig work.