Door dash/Uber driving

[kbulwin]

How much should I save for taxes. 
for door dashing and Uber driving.

What is the percentage for taxes??

[Denisev1220 · Accepted solution]

Self-employment taxes are 15.3% of your net income, meaning after expenses. Then you also have regular income taxes as well. To be on the safe side, I always recommend just putting 15% aside. After taking mileage and other expenses, you have a good chance at getting a refund.

[kbulwin]

Thank you!!

[kbulwin]

I have been setting aside 30%

[Denisev1220]

That is more than necessary. If you can afford to keep doing it you would have a bigger refund. Some people like to break even. 15% is a conservative amount. You won't pay 15% on all your earnings, only the income left over after deductions like mileage etc. Be sure to keep a log books of all miles drven, not just when you have someone in your car.

[VolvoGirl]

But have you been sending it to the IRS as estimated tax payments?  

You must make quarterly estimated tax payments for the current tax 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).

You pay Self Employment tax (Scheduled SE) on a Net Profit of $400 or more on Schedule C.  You pay 15.3% SE tax on 92.35% of your Net Profit (If it is 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.  

The SE tax will be included in your tax due or reduce your refund.  It is on the 1040 Schedule 2 line 4 which goes to 1040 line 23.  The SE tax is in addition to your regular income tax on the net profit.  You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 15 which flows to 1040 line 10.

[kbulwin]

Perfect, thanks!

do you know how much of a deduction would be from miles driven?

[kbulwin]

I have just set aside in a savings account

[Denisev1220 · Accepted solution]

65.5 cents for eery mile driven in 2023.