For example, if your itemized deductions totaled more than $6,350 in 2017, you might benefit more from itemizing.īeginning in 2018, unreimbursed employee expenses are no longer deductible making it potentially more profitable to be an independent contractor rather than an employee.

It may be worth itemizing expenses when they will exceed the standard deduction you're allowed for your filing status. Itemized deductions are reported on Schedule A. Generally, you can either take a standard deduction, such as $6,350 if you're filing 2017 taxes as a single person, or you can list each of your deductions separately.

Itemizing Expenses on Schedule A (for tax years prior to 2018)Įmployee food-delivery drivers often spend their own money on the job, so you might be able to deduct certain work-related costs at tax time including:ĭeductions can lower the amount of your income that's taxable-which reduces your total tax bill and maximizes your refund.

You can use TurboTax’s free tax estimator to get an approximation of what you might owe.Įmployees: Deducting vs. Independent contractors, on the other hand, have to pay their own taxes as they go by estimating the tax they owe and sending the IRS recurring payments throughout the year. For employees, they typically will withhold from each paycheck federal income taxes on their earnings. On-demand food companies can contract with drivers to make deliveries or hire them as employees. The way you file your tax return for this innovative and evolving line of work largely depends on whether your delivery company hires you as an employee or as an independent contractor.

The mileage method uses the IRS’s rate of 58.5 cents per mile for the first half of tax year 2022 and 62.5 cents per mile for the second half of 2022.

For either method, you need to know how many miles you drove your vehicle for both business and personal purposes during the tax year.

There are two ways to calculate your vehicle expenses: the actual expenses method or the mileage method.

If you’re an independent contractor, you generally can deduct business expenses such as phone bills and gas or mileage expenses on Schedule C.

If you’re an employee of a delivery company, you can only deduct unreimbursed employee expenses, including mileage, for tax years prior to 2018.

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