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I started working for Doordash, a food delivery service. Technically I think I am a self-employed contractor.

I saw online that you don't have to declare taxes if you make less than $12,200 in a year. However I also read that you're supposed to declare taxes if you make more than $400 as a self-employed contractor and that you will actually have to pay taxes on everything you make.

Do I have to declare taxes if I make less than $12,200 this year, and will I have to pay taxes on that amount? Let's say I only make $8,000 before Jan 1st for the entire 2020 year; will I actually have to pay taxes on that, and if so how much? I'm in California, single no children, currently living in my car (no property or anything).

Chris W. Rea
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deliveryguy
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2 Answers2

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Because you're self-employed and make more than $400, you'll need to file a federal return. If you make less than the standard deduction ($12,400 for a single person in 2020), you won't owe any income tax, but you will still owe self-employment tax. On $8,000 of net profit you would owe $1,130 (use an online calculator like this one). Make sure you deduct all expenses to reduce the tax you owe.

Also make sure to look into California's filing requirements.

Craig W
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You got this gist of it. However, I don't see anyone mention the Earned Income Credit. I want to say you need to be at least 25, but am not 100% sure on that. https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit

I saw someone else mention mileage and depreciation. I'd be shocked if it is better for you to keep gas receipts and depreciation records (year to year). A mileage log book isn't that hard. It sounds like you don't have a log book. A shame - NOT - since no log book -> no deduction -> higher EITC at your income level. Start keeping one now. Run the taxes both ways.

There is nothing more certain than death and taxes.

Flux
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Jim M
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