Shipt and Doordash delivery drivers usually work as independent contractors. This means that you are responsible for paying your own taxes. The general rule for paying estimated taxes is the total amount you must pay is the smaller of:
- 90% of your total expected tax for 2023 or,
- 100% of the total tax shown on your 2022 return. Your 2022 tax return must cover all 12 months.
Yes, the IRS and most states require that you pay quarterly. The year is divided into four payment periods. Each period has a specific payment due date. If you don't pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you are due a refund when you file your income tax return. The general due dates are April 15, June 15, September 15 and January 15 of the next year.
Typically, underpayment penalties are 5% of the underpaid amount and are capped at 25%. Underpaid taxes also accrue interest at a rate that the IRS sets annually.
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