My son is a part time DoorDasher while finishing college. His earnings are less than the standard deduction so would not have to pay any federal taxes but it appears he owes a $755 tax for Self Employment. Are there any deductions that can be used to offset this tax? Unfortunately, he didn't withhold anything to cover this tax so we are looking at any options to reduce this tax burden.
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Yes, there are deductions that can potentially reduce his tax liability. If he hasn't already, he can deduct his mileage, part of his cell phone bill, and any other expenses he incurred that were directly related to being a DoorDasher. If you haven't upgraded to TurboTax Self-Employed, you will need to do so in order to deduct expenses on Schedule C. See the following TurboTax Help article for Uber & Lyft drivers, the concepts are the same for DoorDash:
Do these deductions apply to the Self employment taxes or would this be for just the federal and state income tax deductions?
The expenses that he can use for his DoorDash income will reduce the profit that he earned from that work. That will reduce the amount of the Self-employment taxes that are owed and will also reduce the federal and state income tax owed. Reduced income will lower what he owes in taxes.
Please see this TurboTax Tips and Advice for Delivery Drivers.
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