If you drive for Delivery Logistics, including Waitr and Bite Squad, you’re responsible for tracking and paying your own taxes. Here’s what you need to know about how much to set aside for taxes and how to file your tax return.
What tax form do you get from Delivery Logistics?
Drivers sign an independent contractor agreement. You won’t get a Form W-2 from Delivery Logistics. Instead, you get a 1099-NEC tax form at the end of the year.
If you worked for Waitr or Bite Squad, your tax information will come from Delivery Logistics. You can view their tax procedures here.
Tip: You don’t need the Delivery Logistics EIN or to enter their 1099 to file your tax return. All you have to do is enter the money you received under your income. Tax software only asks for your 1099s to make it easier to add everything up.
What’s your income?
Your income includes all the money you receive for your delivery services. This includes both cash and electronic payments whether or not you receive a 1099.
Tips are taxable self-employment income the same as your fee for each order.
Waiters and taxi drivers have previously tried to have tips taxed as non-taxable gifts and failed. Trying to say that tips are gifts could result in heavy fines or tax evasion charges for taking a frivolous or fraudulent position.
How can you provide proof of Delivery Logistics income?
Depending on who is asking, there are several different ways you may need to provide proof of Delivery Logistics income.
- Delivery Logistics earnings report from your app
- Bank statements showing deposits
- Tax returns (most lenders will add back certain deductions like your mileage)
Can you deduct mileage?
You can generally take a deduction for all mileage while you are active on the platform. This includes picking up orders, bringing orders to customers, and driving to the next restaurant.
You generally can’t deduct your trip from home to your first stop or from your last stop to home. Those are usually non-deductible commuting miles.
Most delivery drivers get a bigger tax deduction by using the standard mileage deduction instead of the actual expenses method. You can either get an app that tracks your miles or record your odometer at the start and end of your workday.
Standard Mileage Deduction Rate
- 2023: 65.5 cents per mile
- 2022 July through December: 62.5 cents per mile
- 2022 January through June: 58.5 cents per mile
- 2021: 56 cents per mile
Tip: Delivery Logistics does not reimburse mileage, and even if they did, it would still be taxable income.
What expenses does the standard mileage deduction cover?
The standard mileage deduction covers the expenses necessary to keep your car running. This includes:
- DMV fees
You can choose to track all of these expenses separately and claim that amount instead of taking the standard mileage deduction. This requires you to keep track of all of your receipts and why they were necessary business expenses.
Other Delivery Logistics Tax Deductions
You can see a full list of tax deductions for delivery drivers in this post. Here are some of the most important deductions.
Can you deduct your phone bill since you need it to access the app?
You can deduct part of your phone bill if you calculate how much of it is for business purposes. For example, if you work 25% of the hours there are in a week, you may be able to deduct 25%.
Can you deduct your meals while you’re working?
No. Stopping for lunch in the middle of your shift does not make it a business expense. You can typically only deduct meals while entertaining a client or on a multi-day trip away from home.
Are delivery drivers eligible for the 20% Qualified Business Income deduction?
Yes, drivers are eligible for the QBI deduction. This means that you will effectively pay income tax on 80% of your net profit instead of 100% of your net profit.
Here are the income limits to get the full QBI deduction:
|Single and Married Filing Separately||$170,050||$182,100|
|Married Filing Jointly and Qualifying Widower||$340,100||$364,200|
|Head of Household||$170,050||$182,100|
Can drivers open a retirement account to lower their tax bill?
Your net profit counts as earned income. This allows you to contribute to a Traditional or Roth IRA even if you don’t have other income (e.g., students or retirees). As a Schedule C 1099 filer, you may also open a SEP IRA or Solo 401(k). These small business retirement plans allow you to contribute up to 20% of your profits on a tax-deductible basis.
SEP IRAs are usually the easiest to open and have the lowest (or no) fees. The advantage to a Solo 401(k) is being able to make up to $20,500 in employee contributions if you don’t have a 401(k) from a different job or if your main 401(k) has poor investment options.
How much do delivery drivers pay in taxes?
Expect to pay at least a 25% tax rate on your Delivery Logistics income. This includes 15.3% in self-employment taxes for Social Security and Medicare. It also includes your income tax rate depending on your tax bracket.
If you live in a state with income taxes, you’ll also need to file a state tax return.
How do drivers pay taxes?
Delivery Logistics does not take out withholding tax for you. You should make estimated tax payments each quarter. If being a delivery driver is a small portion of your income, you may be able to increase your income tax withholding at your day job instead of paying quarterly taxes.
If you wait until April to pay, you could have to pay a penalty if you owe more than $1,000. To avoid penalties, save enough to make pay at least
|Based on Current Year Tax Return||Based on Prior Year Tax Return|
|AGI up to $150,000 ($75,000 if married filing separate)||90% of current year taxes||100% of prior year taxes|
|AGI over $150,000 ($75,000 if married filing separate)||100% of current year taxes||110% of prior year taxes|
Delivery Logistics Tax Calendar
|Action Needed||2022 Tax Year||2023 Tax Year|
|First Quarter Estimated Tax Payment Due||April 18, 2022||April 18, 2023|
|Second Quarter Estimated Tax Payment Due||June 15, 2022||June 15, 2023|
|Third Quarter Estimated Tax Payment Due||September 15, 2022||September 15, 2023|
|Fourth Quarter Estimated Tax Payment Due||January 17, 2023*||January 16, 2024*|
|Receive Your 1099||No later than January 31, 2023||No later than January 31, 2024|
|File Your Tax Return||Tuesday April 18, 2023 (15th is a Saturday; Monday is Washington, D.C., Emancipation Day)||April 15, 2024|
|Extended Filing Deadline||Monday October 16, 2023 (15th is a Sunday)||October 15, 2024|