1099 delivery drivers save thousands

The fundamental difference between someone who receives a W-2 tax form and someone who receives a 1099 tax form for their work is that the W-2 worker gets a regular paycheck from their employer, and a 1099 worker gets paid whenever the work is finished. Many delivery drivers are self-employed, working as freelancers who receive a 1099. In practical terms, this means that many people need to pay their own delivery driver taxes, which W-2 employees don't. But it also means that delivery drivers get to do something pretty huge that W-2 employees aren't able to: turn a business expense into delivery driver tax deductions. Read more about the 1099 tax form in The Ultimate Guide.

When you work for a company or corporation, that corporation automatically withholds some of your earnings to pay for income tax and SECA taxes (Social Security and Medicare taxes). In an employer-employee situation, you would pay for all of your income tax and half of the SECA tax, or 7.65%. The company you work for would pay the other half, for a total of 15.3%. That's a big chunk of your income, but it's offset to some extent by the fact that for self-employed individuals, half of that payment can be a delivery driver tax write off. All your SECA calculations can be done on the Schedule SE tax form. You can find more information relating to Social Security taxes in The Ultimate Guide.

Every self-employed delivery driver is required to file an IRS form 1040 to report their tax information. This is where you will list any tax deductions and credits you are eligible to claim. One form would be nice, but it gets more complicated with several sub-forms called schedules that report a variety of financial information. You'll need to know how to file taxes as a delivery driver, and a big part of that is reporting all your deductible business expenses on the Schedule C. This is a tax form issued by the IRS to report the income and expenses that are related to your delivery driving or any of your self-employment activities. As a driver, this would include business expenses like car insurance, fuel, repairs and maintenance, mileage and other vehicle-related expenses. For people doing any self-employment work, it could include these expenses as well as advertising expenses, rent, supplies and many other expenses.

Mileage

Some of the first questions people new to the field ask are "Can delivery drivers deduct mileage?" and "Can delivery drivers deduct gas?" One of the easiest tax deductions for food delivery drivers is the mileage deduction. It can be a bit of a pain to keep track of the miles you drive for work, but this delivery driver tax write-off is always worth it at tax time. And today, technology comes to the aid of self-employed people in countless ways when it comes to the tax return for delivery drivers. For example, some apps can track your mileage digitally, so all you have to do is hit record, so-to-speak. This Car Mileage Tax Calculator can also save you a ton of time. You can use the standard rate deduction to deduct mileage for your deliveries. Not every driver knows that among the many delivery driver tax deductions is mileage for trips in addition to deliveries. Mileage for taking your car to the repair shop or mileage for going to the car wash are also tax deductions for delivery drivers. Effective July 1 of 2022, the IRS increased the standard mileage rate from 58.5 cents per mile to 62.5 cents per mile. Or, you can use the actual expenses deduction on the tax return for delivery drivers. Just add up every cost you spent on your car, for deliveries or personal use, and get a year-end total. Multiply that total by the percentage of time you used your car for work, known as the business-use percentage, to get your actual expense deduction when you go to do your delivery driver taxes.

Cell phone

A common delivery driver tax write-off is your cell phone. If you use a separate phone just for your work making deliveries, you can claim every cent you paid for the phone and the monthly cost of your minutes and data plan. Even if you use the phone only partially for work and the rest is personal use, you can still deduct a portion of those expenses.

Commissions and fees

With so many more options for delivery services on the market, it's a good time to be a delivery driver. Many of the newer app-based services charge drivers a commission, which they can typically deduct from their taxes. The same goes for fees drivers often have to pay to the platforms. Knowledge is power, and when it comes to taxes and write-offs, delivery drivers need information about the company they work for.

• Postmates driver taxes
• Uber tax information
• Doordash tax write offs
• Instacart tax deductions
• Grubhub tax write-offs

Supplies

It's no secret that take-out food is a more popular delivery item than ever. With so many more kinds of food deliveries and drivers carrying multiple deliveries at a time, the need to keep foods hot or cold has drastically increased. You can deduct the cost of things like hot bags or courier backpacks for this purpose. The same is true for many other items delivery drivers may need, such as phone chargers, a system to mount your phone or a mileage tracking app subscription.

Bike and accessories

One of the best tax deductions for delivery drivers in many cities, delivery drivers on bikes is a common sight. If you use a bike instead of a car to make your deliveries, the cost of the bike, repairs and accessories can be tax write-offs.

Roadside assistance

This can be a lifesaver for any driver, but especially for delivery drivers, whose livelihood depends on not being stranded on the side of the road. And yet, it's not a well-known delivery driver tax write-off. If you subscribe to a roadside assistance plan, you can deduct a percentage of the fee.