How gig worker taxes work
You're a 1099 contractor — not an employee. The platform doesn't withhold anything. Every dollar you earn is yours until you owe the IRS for federal income tax + self-employment tax + (in most states) state income tax. Most gig workers should set aside 20-30% of every payout for taxes.
SE tax is 15.3% of net SE income (after expenses)
- SE tax = (gross − expenses) × 0.9235 × 15.3% — covers Social Security + Medicare
- The platform doesn't pay an employer-side match, so you pay both halves (15.3% total vs 7.65% if you were a W-2 employee)
- You can deduct half of the SE tax as an above-the-line adjustment on Form 1040
Federal income tax: applies to net SE income above standard deduction
- 2026 standard deduction: $16,100 single / $32,200 MFJ / $24,150 HoH
- Subtract std deduction + half-SE-tax from net SE → that's your federal taxable income
- Apply 2026 brackets (10% / 12% / 22% / 24% / 32% / 35% / 37%)
State income tax: 9 states have $0
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. Set state rate to 0 for these. Other states.
Mileage is the biggest deduction for drivers
The IRS standard mileage rate is $0.70/mile in 2026. For a full-time DoorDash driver doing 25,000 business miles a year, that's a $17,500 deduction — often more than the entire profit margin after gas. Track every mile (apps like MileIQ, Stride, Everlance) — IRS audit triggers without a log.
What counts as business miles
- ✓ Online time waiting for orders (most platforms — verify with your tracking app)
- ✓ Drive to pickup → drop-off
- ✓ Drive between deliveries
- ✓ Drive home from last delivery (the "deadhead" — gray area, see below)
- ✗ Commute from home to your first pickup (not deductible)
- ✗ Personal trips between gig sessions
Standard mileage vs actual expenses
Standard mileage ($0.70/mi) covers gas, oil, maintenance, depreciation, insurance, registration. Actual method tracks each receipt × business-use percentage. For most rideshare/delivery drivers, standard mileage produces a bigger deduction. Compare side by side.
Platform-specific tax notes
DoorDash
- 1099-NEC issued if you earn $2,000+ (TY 2026 OBBBA threshold) — gross-payment basis, not net
- Platform fee already netted out before payout — your 1099 is what hit your bank, not face-value of orders
- Mileage tracking via Dasher app: includes online time + drive miles. Cross-check with a separate app like Stride.
- Tips reported on the 1099 — they are taxable, no exception
- Full DoorDash tax guide
Uber + Uber Eats + Lyft
- 1099-K from the rider-payment side; 1099-NEC from incentive/bonus side
- Uber's "gross" 1099-K shows the rider's full payment (including platform fee) — Uber's fee is then deductible as a business expense
- Lyft uses a similar gross-then-deductible-fee structure
- Mileage tracking: Uber has built-in stats but they're conservative (online time underreported). Use Stride or MileIQ for accurate numbers.
- Full rideshare tax guide
Instacart
- 1099-NEC issued if you earn $2,000+ (TY 2026)
- Two earning types: Full-Service Shopper (delivery + shopping, you drive) — your usual mileage applies; In-Store Shopper (no delivery) — these are W-2 employees, not 1099 contractors. Mileage doesn't apply to in-store roles.
- Full Instacart tax guide
Grubhub / Amazon Flex / Uber Eats
- Standard 1099-NEC ($2,000+ TY 2026)
- Mileage rules same as other delivery platforms
- Amazon Flex blocks are scheduled in advance — easier to track miles per shift
Quarterly estimated tax payments
If you'll owe more than $1,000 in federal tax for the year (almost every gig worker does), you must make estimated quarterly payments. The 2026 deadlines: April 15, June 15, September 15, January 15, 2027. Pay 25% of estimated annual tax each quarter via IRS Direct Pay (free) or EFTPS (free, supports recurring). Full estimated tax guide.
Late payment penalty: 7% APR Q1 2026, 6% Q2 onward (federal short-term rate + 3%). Penalty calculator.
Related tools and guides
- Standard mileage vs actual expenses
- Home office deduction (rare for drivers)
- Underpayment penalty calculator
- DoorDash tax guide
- Uber + Lyft tax guide
- Instacart tax guide
- All gig worker deductions checklist
Estimates only — not tax, legal, or financial advice. Sources: IRS Notice 2025-83 (2026 standard mileage rate), IRS Rev. Proc. 2025-32 (TY 2026 brackets and std deduction), IRS Notice 2025-67 (TY 2026 retirement limits), platform 1099 reporting per OBBBA P.L. 119-21. Platform-specific notes pulled from each platform's tax-summary documentation. For decisions affecting your finances, consult a licensed CPA or enrolled agent.