DoorDash and Instacart Taxes: What Delivery Workers Owe

Food and grocery delivery are among the most common side hustles, and they come with a tax bill that surprises many first-time workers. You are an independent contractor, so you handle your own taxes.

What counts as income

Your taxable income includes delivery pay, tips, promotions and bonuses. It does not include money you spent on groceries and were reimbursed for, which is a pass-through. Platforms may report your earnings on a 1099-NEC or 1099-K. Even if you get no form, you must report everything.

Business or hobby

If you deliver regularly to make a profit, you are in business and use Schedule C. You can deduct expenses against your income, and you pay self-employment tax on net profit of $400 or more.

The big deduction: mileage

Your largest expense is usually your vehicle. You can use the standard mileage rate (70 cents per mile for 2025, updated each year) or actual expenses. Miles between the restaurant or store and the customer count. Miles from home to the first pickup, or back home at the end of a shift, may be treated as commuting. A log is essential.

Example: 12,000 delivery miles at 70 cents is $8,400. If you earned $24,000, your net profit before other expenses falls to $15,600.

Other deductible expenses

Expense	Notes
Insulated bags and delivery gear	Deductible business supplies
Phone and data	Business-use percentage
Parking and tolls	Fully deductible when work-related
Platform fees and equipment	Deductible if you paid them
Car accessories and cleaning	Part of business use
Background check or account fees	Business expenses
Health insurance premiums	May be deductible under the self-employed rules

Difference between apps

The tax treatment is the same, but the work differs. Instacart shoppers often drive between stores and customers, so keep records of shopping time and miles. Food delivery workers should record active time and dead miles between orders in a way that supports your log.

Your tax bill

Self-employment tax applies to net profit after expenses, about 14.1% of profit before the half deduction. Income tax depends on your total income. If you earned $18,000 net on top of a day job, self-employment tax is about $2,550 and the income tax is based on your bracket. Set aside 20% to 30% of net profit unless you adjust your job withholding.

Estimated taxes

Delivery work usually leaves you with no withholding, so pay estimated taxes quarterly if you expect to owe at least $1,000. You can often avoid this by increasing the withholding at your regular job on a new W-4.

Tips

Tips are taxable. Rules created for certain years may allow a deduction for qualified tips in some jobs, with limits and conditions. Check the latest IRS guidance before claiming it.

Records to keep

Annual earnings summary from each app.
Mileage log, including date, start, end and purpose.
Receipts for supplies, gear and fees.
Bank statements showing deposits.

Common mistakes

Counting reimbursed grocery costs as income or expenses.
Forgetting to log miles between orders.
Using the actual-expense method without records.
Ignoring quarterly payments.

Frequently asked questions

Do I owe tax if I deliver only a few hours a week?

Yes, if you have net profit. You report it, and you owe self-employment tax at $400 of net earnings.

Can I deduct my phone?

Yes, the business-use share of your plan and device costs.