Delivery Logistics Driver Tax Guide

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.

Reminder: 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.

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 fares. 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

  • 2022 (Miles for July through December): 62.5 cents per mile
  • 2022 (Miles for January through June): 58.5 cents per mile
  • 2021: 56 cents per mile
  • 2020: 57.5 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:

  • Gas
  • Maintenance
  • Depreciation
  • Insurance
  • 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 can 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:

Filing Status20222021
Single and Married Filing Separately$170,050$164,900
Married Filing Jointly and Qualifying Widower$340,100$329,800
Head of Household$170,050$164,900

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 ReturnBased on Prior Year Tax Return
AGI up to $150,000 ($75,000 if married filing separate)90% of current year taxes100% of prior year taxes
AGI over $150,000 ($75,000 if married filing separate)100% of current year taxes110% of prior year taxes
To avoid the estimated tax penalty, you must pay one of the above percentages through a combination of estimated tax payments and withholding. Typically, you need to make four equal payments. If you have uneven income, you can use the annualized income installment method.

Delivery Logistics Tax Calendar

Action Needed2021 Tax Year2022 Tax Year
First Quarter Estimated Tax Payment DueApril 15, 2021April 15, 2022
Second Quarter Estimated Tax Payment DueJune 15, 2021June 15, 2022
Third Quarter Estimated Tax Payment DueSeptember 15, 2021September 15, 2022
Fourth Quarter Estimated Tax Payment DueJanuary 15, 2022*January 15, 2023*
Receive Your 1099No later than January 31, 2022No later than January 31, 2023
File Your Tax ReturnMonday April 18, 2022 (due to Good Friday and Passover on the 15th)Tuesday April 18, 2023 (15th is a Saturday; Monday is Washington, D.C., Emancipation Day)
Extended Filing DeadlineMonday October 17, 2022 (15th is a Saturday)Monday October 16, 2023 (15th is a Sunday)
*You can skip the final estimated tax payment if you file your tax return and pay your full balance due by February 1st.

What tax software should you use?

Almost any tax software that supports self-employment income will give you what you need. Cash App Taxes is one of the few options that lets you file for free. Most other tax software providers don’t include Schedule C in their free tier.

Keep in mind that you’re filing a single tax return with all of your other income, credits, and deductions. This might include work you do for Uber, an hourly job, or child tax credits. Before you choose which software to use, make sure it can handle everything you need in addition to doing your Delivery Logistics taxes.

 

Disclaimer: This post is provided for general information only. The information may be outdated or may not fully cover the unique circumstances of your specific situation. Always consult with an appropriate professional before making important decisions.

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