Hello, I recently started DoorDashing for extra money. I’m tracking my miles/expenses and really confused on what the tax rates are in PA.

Example: Week 1 I made $380, my expenses were $258 (mileage) which means my earned income was $122 (I think).

What rate should I deduct from that $122? Is that how it works? Are there any weird self employment rates in PA etc.?

Any help would be appreciated. I plan on doing this and trying to make like $250ish a week. Thanks in advance!

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Aggravating_Foot_528 t1_jcqcew9 wrote on March 18, 2023 at 7:09 PM

You need to talk to a tax professional or pay for a program like TurboTax small business. Reddit isn't the place to get tax advice that you can 100 percent trust. If you screw this up you'll owe federal, local, and state back taxes plus penalities..

Here is a resource to point you in the right direction.

https://turbotax.intuit.com/tax-tools/calculators/self-employed/

Also send in 3.07 percent per quarter to the state and whatever local income tax is to local municipal

You need to make sure you are logging all miles in the car so you can account for all of them. Business miles and non business miles.

DirtWizardDisciples t1_jcrxkr7 wrote on March 19, 2023 at 2:19 AM

Intuit can cordially suck an egg. I'm not a tax/finance pro, but if I were an independent contractor or self employed, I'd start here when doing my own taxes on FreeTaxUSA https://www.freetaxusa.com/help/display_faq.jsp?faq_id=7436

dclxvi616 t1_jcs4yny wrote on March 19, 2023 at 3:22 AM

I don't know why people can't seem to give you a straight answer. PA State Income Tax is levied at 3.07%.

If you expect more than $8000 of PA taxable income in the year that won't be subject to employer withholding you are required to file estimated taxes quarterly. This may or may not apply to you depending on your revenue and expenses. https://revenue-pa.custhelp.com/app/answers/detail/a_id/246/~/who-should-make-estimated-payments-for-personal-income-tax%3F

You may or may not be able to qualify for Tax Forgiveness: https://www.revenue.pa.gov/TaxTypes/PIT/TaxForgiveness/Pages/default.aspx

Good luck.

Logan_Holmes t1_jcqulsi wrote on March 18, 2023 at 9:19 PM

Scroll down to the taxes portion of this guide for Doordash drivers

aust_b t1_jcrald0 wrote on March 18, 2023 at 11:21 PM

When I did rideshare in college, I just saved 20% off all my income from it for taxes. Kept a mileage log too which ended up keeping most of that saved tax money in my pocket. Turbo tax schedule C will be your friend, I know Uber/lyft provided free TurboTax when I did it years ago.

Aggravating_Foot_528 t1_jcrme11 wrote on March 19, 2023 at 12:50 AM

And TurboTax schedule c will populate pa schedule UE, which will also be used to decrease local tax.

Equivalent_Alps_8321 t1_jcsd29s wrote on March 19, 2023 at 4:39 AM

I'm guessing this would be the same kind of taxes for Rover and Wag dog walking?

Another question, if you're doing grass cutting for someone under the table (not a real employee), how do you properly file those taxes?

DirtWizardDisciples t1_jcsh9gr wrote on March 19, 2023 at 5:25 AM

>if you're doing grass cutting for someone under the table (not a real employee), how do you properly file those taxes

"Under the table" means that the money that is changing hands isn't reported to any government entity, which is generally not legal. If you start jumping though hoops to pay taxes on this type of pay, it's no longer under the table.

[deleted] t1_jcsjnkp wrote on March 19, 2023 at 5:54 AM

[deleted]

DirtWizardDisciples t1_jctwfng wrote on March 19, 2023 at 3:12 PM

Ah, I think I missed the point to your previous post. AFAIK, cash income like that should be part of Schedule C. But, if you start reporting previously unreported income (particularly if it's in larger amounts) get ready for the other shoe to fall as tax collectors may start looking into it.

https://www.freetaxusa.com/help/display_faq.jsp?faq_id=3020

PawBandito t1_jctxul6 wrote on March 19, 2023 at 3:22 PM

Use Stand Mile Deduction which uses miles to factor in other expenses like gas & maintenance. Take this amount of miles and go to accountant with it; they will handle the rest.

ronreadingpa t1_jcv8991 wrote on March 19, 2023 at 8:35 PM

While not tax related, consider wear and tear on your vehicle and value of your time. $250 per week net would be good if only doing it 10-20 hours a week. Otherwise, consider something else, such as working part time somewhere. Many places pay around $15 per hour.

Another consideration is car insurance. Be sure to add a rideshare endorsement (even though you're not transporting anyone) or similar (may be called something different) to your insurance policy. Some companies offer it at a nominal cost. Others don't and insist on commercial coverage (overkill for small-time gig work). Many drivers overlook the insurance coverage aspect at their peril.