DoorDash Dasher Taxes in New Mexico - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is DoorDash Dasher income taxable in New Mexico?

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

Federal Taxes: You'll report your DoorDash earnings on Schedule C (Profit or Loss from Business) as part of your Form 1040. This form allows you to deduct business expenses (more on that below) to arrive at your taxable profit. Even if DoorDash provides a 1099-K, it's your responsibility to accurately report all income, even if it's below the 1099-K reporting threshold.

New Mexico Taxes: New Mexico has a graduated income tax system. This means the tax rate you pay increases as your income increases. Your DoorDash profit (after deducting business expenses on your federal Schedule C) will be transferred to your New Mexico tax return (Form N-11) to calculate your state income tax liability. New Mexico also conforms to many federal deductions, but it's crucial to check for any differences on the New Mexico Taxation and Revenue Department website (https://www.tax.newmexico.gov/).

Top Tax Write-offs for DoorDash Dashers

As a self-employed Dasher, you can significantly reduce your tax bill by claiming eligible business deductions. Here are some key ones:

• 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 every mile driven while actively delivering orders (from the time you accept an order until delivery is complete). Apps like Stride Tax or Everlance can help with this.
• Phone Expenses: You can deduct the portion of your cell phone bill that's used for business. If you use your phone solely for DoorDashing, you can deduct the entire bill. Otherwise, you'll need to calculate the percentage of business use.
• Hot Bags & Delivery Equipment: The cost of items like insulated delivery bags, phone mounts, and dashcams are deductible. For items with a useful life of more than one year (like a dashcam), you'll likely need to depreciate the cost over several years.
• DoorDash Software/Subscription Fees: Any fees you pay for apps or services specifically used to help you DoorDash (e.g., tax preparation software focused on gig workers) are deductible.

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 (income minus expenses). Also, you don't pay self-employment tax on the portion of your earnings that exceeds the Social Security wage base (which is updated annually – for 2024, it's $168,600). You do pay Medicare tax on all self-employment income. Half of your self-employment tax is deductible from your gross income on Form 1040.

Closing Tip for New Mexico Residents

Navigating self-employment taxes can be complex. I strongly recommend keeping meticulous records of your income and expenses throughout the year. Consider using accounting software or a dedicated app for gig workers. Don't hesitate to consult with a qualified tax professional in New Mexico – we can help you maximize your deductions and ensure you're compliant with both federal and state tax laws. The New Mexico Taxation and Revenue Department website (https://www.tax.newmexico.gov/) is also a valuable resource. Wishing you a profitable and tax-smart year of dashing!