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Filing Tax Returns for Delivery Drivers: Tips and Communication

Updated for Taxation Year 2022 • December 17, 2022 11:03 AM

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OVERVIEW

Whether you're merely starting out or have been in the field for a while, being a delivery commuter comes with its ain nuances when it's time to file your taxes. Here are four steps to help guide you lot through the process and aid ensure accuracy while maximizing your return.

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With the growth in the on-demand economy, beingness a delivery commuter can be a peachy fashion to make money, either total time or as a side gig. Whether yous work for companies similar Amazon, UPS or a new app-based platform, beingness a commitment driver ways understanding primal facts so you lot can file your taxes accurately and on-time.

Here's what you should know about filing tax returns for delivery drivers.

Stride 1: Employee vs. independent contractor

How you report your income and whether you tin can deduct expenses depends on whether you're an employee or an contained contractor.

• Employees generally receive regular paychecks usually with income, Social Security and Medicare taxes withheld from their wages. At year-end, they typically receive a Form W-2 showing the income they earned for the year and total tax withheld.
• Independent contractors are typically considered cocky-employed. The companies that hire them don't usually withhold income or payroll taxes from their payments. At the end of the twelvemonth, they typically receive a Course 1099-NEC showing full earnings for the year.

If y'all're not certain whether you lot're an employee or a contract worker, talk to your employer.

Pace 2: Select the right tax forms

Whether you're an independent contractor or an employee, you'll employ Form 1040 to file your tax render as a delivery driver.

• If you're an employee, the wages from your W-ii proceed line one of Form 1040, and the federal income taxes your employer withheld keep line 17.
• If you use revenue enhancement filing software like TurboTax to prepare your tax return, the software will automatically enter your income on the correct lines.

Independent contractors have to adhere some additional schedules to Form 1040.

• You'll typically utilize Schedule C to report the income y'all earned every bit a commitment driver.
• Yous'll use Schedule SE to calculate your cocky-employment taxation.

Again, if you use TurboTax to gear up your return, the software will inquire you a serial of questions and fill up out the proper forms for you lot.

Stride 3: Take advantage of tax write-offs

If you're an employee, you lot don't have a lot of opportunities for tax write-offs related to your delivery commuter income. Your employer might cover or reimburse yous for work-related expenses.

Independent contractors, nonetheless, can typically deduct piece of work-related expenses on Schedule C. Hither are some common expenses you may be able to deduct:

• Mileage. It's essential to keep runway of all of the miles yous drove for business. If you lot keep careful records, you can usually deduct the miles you bulldoze making deliveries likewise every bit miles for picking up supplies and running business organisation-related errands. For 2022 taxation returns, you tin use the standard mileage charge per unit to take a deduction of $0.56 per business mile. Alternately, you tin can use the actual expense method to deduct the business portion of costs like gas, repairs and maintenance, car insurance, registration and auto loan interest or lease payments.
• Parking and tolls. In improver to your mileage, you can too deduct parking fees and tolls related to your piece of work.
• Mobile phone. Do you have a divide phone that yous use just for delivery driving? If so, you tin deduct 100% of the toll of the phone and your monthly data plan. Still, if yous employ your phone for both work and personal needs, you'll need to split up your deduction betwixt business and personal apply.
• Supplies. Many delivery drivers purchase hot bags and blankets for keeping food deliveries warm, courier backpacks, phone chargers and dashboard mounting systems and other supplies. Supplies like these are generally a deductible expense.
• Roadside assistance. Did yous get a roadside assistance program? You can deduct a percentage of your annual membership fee based on the percentage of miles y'all drive for piece of work.
• Commissions and fees. If y'all bulldoze for a delivery app and they charge a committee, yous can typically deduct the fees paid to the platform.
• Bike and accessories. If you deliver by wheel instead of motorcar, more often than not you can write off the cost of repairs as well as any necessary accessories.

Step four: Make estimated revenue enhancement payments

As an contained contractor, you're normally responsible for paying your own taxes. You typically don't have an employer to withhold them for you. And just every bit an employer withholds a portion of each paycheck, the IRS expects yous to pay taxes as you earn money throughout the year.

• If yous await to owe taxes of $i,000 or more than, yous're usually required to make quarterly estimated tax payments.
• Those payments are generally due on Apr 15, June fifteen, September fifteen and Jan 15 of the following revenue enhancement year or the adjacent business day due to a weekend or holiday.
• If yous skip making a payment or pay late, you may have to pay a punishment when you file your tax return.

Tips for Filing Tax Returns for Delivery Drivers

If all of this seems similar a lot of work, don't worry. You can utilize QuickBooks Cocky-Employed to rails your income and expenses and figure out your estimated revenue enhancement payments. The software will handle the math for you. It tin can even walk you through making an electronic payment to the IRS.

TurboTax Self-Employed volition ask you simple questions nearly your life and assistance you fill out all the right forms. Perfect for contained contractors and small businesses. We'll search over 500 tax deductions to go you every dollar you deserve and assistance you uncover industry-specific deductions.

Perfect for contained contractors and pocket-sized businesses

TurboTax Cocky-Employed searches over 500 tax deductions to become you lot every dollar you deserve.

Real tax experts on demand with TurboTax Live Basic

Become unlimited communication and an expert final review. Washed correct, guaranteed.

For simple tax returns only

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The higher up article is intended to provide generalized fiscal information designed to brainwash a wide segment of the public; it does not give personalized revenue enhancement, investment, legal, or other business concern and professional communication. Earlier taking any action, you should e'er seek the assistance of a professional person who knows your detail situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business concern.

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Source: https://turbotax.intuit.com/tax-tips/self-employment-taxes/filing-tax-returns-for-delivery-drivers-tips-and-advice/L0UbcGiKQ

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