DoorDash Dasher Taxes in New Jersey - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is DoorDash Dasher income taxable in New Jersey?

Yes, absolutely. Income earned as a DoorDash Dasher is taxable at both the federal and New Jersey state levels. The IRS considers you self-employed, meaning you're essentially running your own business. This has implications for how you report your income and pay taxes.

Federal Requirements: You'll report your DoorDash earnings on Schedule C (Profit or Loss From Business) as part of your Form 1040. Schedule C is where you detail your income and expenses. The profit (income minus expenses) from Schedule C is then added to your other income (like wages from a W-2 job) to determine your adjusted gross income (AGI).

New Jersey Requirements: New Jersey has a graduated income tax system. This means the tax rate you pay increases as your income increases. Your DoorDash profit (from your federal Schedule C) will be included in your New Jersey taxable income, and taxed according to the current NJ tax brackets. You'll file this income on New Jersey Form NJ-1040. It's crucial to accurately report your income to avoid penalties or interest.

Top Tax Write-offs for DoorDash Dashers

As a self-employed individual, you can significantly reduce your tax liability by claiming eligible business expenses. Here are some key deductions for DoorDash Dashers:

• Mileage: This is often the biggest deduction! For 2024, the standard mileage rate is 67 cents per mile for business use. Keep a detailed log of all miles driven while "on duty" (from accepting a delivery request to completing it). You can use apps to track this automatically.
• Phone Expenses: You likely use your phone for navigation, accepting orders, and communicating with DoorDash. You can deduct the percentage of your phone bill that corresponds to business use. If you use your phone exclusively for DoorDash, you can deduct the entire bill.
• Hot Bags & Delivery Equipment: The cost of items like insulated hot bags, phone mounts, and other equipment used specifically for deliveries are deductible.
• DoorDash Software/Subscription Fees: Any fees you pay directly to DoorDash (beyond the commission they take from orders) for access to tools or services can be deducted.

Important Note: Keep receipts and documentation for all expenses you claim. The IRS may ask for proof.

The 15.3% Self-Employment Tax Surprise

When you're an employee, your employer pays half of your Social Security and Medicare taxes. As a self-employed individual, you're responsible for both the employer and employee portions – a total of 15.3%. This is called self-employment tax.

You'll calculate this on Schedule SE (Self-Employment Tax). The good news is you only pay self-employment tax on your profit (after deducting business expenses). Also, you don't pay self-employment tax on the portion of your earnings that exceeds the Social Security wage base (which changes annually – for 2024, it's $168,600). You can also deduct one-half of your self-employment tax from your gross income on Form 1040.

Closing Tip for New Jersey Residents

Navigating self-employment taxes can be complex. As a New Jersey resident, remember to factor in your state income tax obligations alongside your federal responsibilities. Consider using tax software designed for self-employed individuals or consulting with a qualified tax professional (like myself!) to ensure you're maximizing your deductions and complying with all applicable laws. Proper planning and record-keeping throughout the year will make tax time much smoother. Good luck, and happy dashing!