I work for doordash, instacart, and grubhub, i made about 11k but my mileage deduction is about 20k for my work miles. What happens in situations like this?

[rjs]

What happens is that you will have a net business loss for the year. The loss will be subtracted from your other income, reducing your AGI and your taxable income.

[Critter-3]

All 3 of those are reported on ONE Sch C form ... 

If you are new to being self employed, are not incorporated or in a partnership  and  are acting as your own bookkeeper and tax preparer you need to get educated ....  

If you have net self employment income of $400 or more you have to file a schedule C in your personal 1040 return for self employment business income. You may get a 1099-NEC for some of your income but you need to report all your income.  So you need to keep your own good records. Here is some reading material……

IRS information on Self Employment….
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center 

Publication 334, Tax Guide for Small Business
http://www.irs.gov/pub/irs-pdf/p334.pdf 

Publication 535 Business Expenses
http://www.irs.gov/pub/irs-pdf/p535.pdf 

Home Office Expenses … Business Use of the Home

https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction

https://www.irs.gov/pub/irs-pdf/p587.pdf

Publication 463 Travel, Gift, and Car Expenses

https://www.irs.gov/pub/irs-pdf/p463.pdf 

Publication 946 … Depreciation

https://www.irs.gov/pub/irs-pdf/p946.pdf

          

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Self Employed return and will help you keep up in your bookkeeping all year along with calculating the estimated payments needed ....
http://quickbooks.intuit.com/self-employed

          
Self Employment tax (Scheduled SE) is generated if a person has $400 or more of net profit from self-employment on Schedule C.  You pay 15.3% for 2017 SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 57.  The SE tax is in addition to your regular income tax on the net profit.
 


PAYING ESTIMATES
For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% for 2017  SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.

You must make quarterly estimated tax payments for the current tax year (or next year) if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits. 
 
- 2. You expect your withholding and credits to be less than the smaller of: 
    90% of the tax to be shown on your current year’s tax return, or 
  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

To prepare estimates for next year, You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

OR Go to….
Federal Taxes or Personal (H&B version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button

[NCperson]

@panda0777 note that the milege from your home to the first dropoff and the mileage from the last dropoff to your home are considered communiting milegage and are not tax deductible....hopefully that was excluded from  your work mileage.  

if you have $20k in work mileage that is about 30,000 of miles...is that right? 

[panda0777]

Yes close to 30k and yes i did not count home to work .. i work delivery the entire year 4-7 days a week @NCperson 

[panda0777]

This didn’t really answer my question 

[rjs]

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@panda0777 wrote:

This didn’t really answer my question 

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What is "this" that didn't answer your question? You didn't say who you are replying to.

The question you asked was "What happens in situations like this?" I assumed that when you said "what happens" you meant what happens on your tax return (since this is a tax forum), and that the "situation" you were referring to is that your expenses are higher than your gross income from the delivery work. I explained how that affects your tax return. Is that not what you meant?

To be more specific, on your tax return you will report $11,000 of business income and $20,000 of business expenses, giving you a net business loss of $9,000.

If your question has not been answered, perhaps you could explain in more detail exactly what it is that you want to know.

[Mike9241]

you face another issue.  hobby loss.

hobby loss rules disallow losses of activities if the IRS concludes that you're not engaged in it for profit activity. Profit must be demonstrated for any three out of five consecutive tax years.  it occurs if the iRS audits and you can not provide sufficient information like a business plan to show that the activity hopefully it will be profitable.

Here are nine things taxpayers must consider when determining if an activity is a hobby or a business:
Whether the activity is carried out in a businesslike manner and the taxpayer maintains complete and accurate books and records.

Whether the time and effort the taxpayer puts into the activity show they intend to make it profitable.

Whether they depend on income from the activity for their livelihood.

Whether any losses are due to circumstances beyond the taxpayer's control or are normal for the startup phase of their type of business.

Whether they change methods of operation to improve profitability.

Whether the taxpayer and their advisors have the knowledge needed to carry out the activity as a successful business.

Whether the taxpayer was successful in making a profit in similar activities in the past.

Whether the activity makes a profit in some years and how much profit it makes.

Whether the taxpayers can expect to make a future profit from the appreciation of the assets used in the activity.