DoorDash Dasher Taxes in South Dakota - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is DoorDash Dasher income taxable in South Dakota?

Yes, your income as a DoorDash Dasher is taxable, but the situation is simpler in South Dakota than in many other states. The federal government considers you self-employed, meaning you operate as an independent contractor, not an employee of DoorDash. This means you'll report your earnings on Schedule C (Profit or Loss From Business) when you file your federal income tax return (Form 1040). You’ll need to track your income (the money DoorDash pays you) and your expenses (the costs you incur while dashing).

South Dakota Specifics: South Dakota is one of the few states with no state income tax. This means you won’t file a state income tax return or pay state income tax on your DoorDash earnings. However, your federal tax obligations still apply.

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 common 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 actively delivering orders (from the time you accept an order to the time you drop it off). Apps like Stride or Everlance can help with this.
• Phone Expenses: You can deduct the portion of your cell phone bill that relates to your DoorDash work. If you use your phone solely for DoorDash, you can deduct the entire bill. Otherwise, you'll need to calculate the percentage of time you use it for business.
• Hot Bags & Delivery Equipment: The cost of items like insulated delivery bags, phone mounts, and other equipment used specifically for dashing are deductible.
• DoorDash Software/Subscription Fees: Any fees you pay for apps or services that directly help you with DoorDash (e.g., tax preparation software specifically for gig workers) are deductible.

The 15.3% Self-Employment Tax Surprise

Many Dashers are surprised to learn about self-employment tax. 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 calculated on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on your profit (your earnings minus your business expenses). You also get to deduct one-half of your self-employment tax from your gross income on Form 1040.

You won't owe self-employment tax until your net earnings (profit) exceed $400.

Closing Tip for South Dakota Residents

While you benefit from South Dakota’s lack of state income tax, diligent record-keeping is crucial for maximizing your federal tax savings. Keep detailed records of your income and expenses throughout the year. Consider using accounting software or consulting with a tax professional to ensure you're taking all the deductions you're entitled to. Filing accurately and on time will help you avoid penalties and keep your tax situation stress-free. Good luck and happy dashing!